CHARLESTON AIR FORCE BASE, S.C. –
With gas prices hovering at $4 a gallon, more and more consumers are reconsidering off-loading their gas-guzzlers for smaller, more fuel-efficient alternatives. Since high gas prices are more than likely here to stay, looking at alternatives is a smart choice.
Although selling your low miles-per-gallon vehicle may seem like the best alternative, in reality, it may not be. Let's consider a scenario where an Airman decides to trade-in his 8-cylinder truck that only gets about 15 mpg. He is tired of spending $300 a month on gas so he decides to get rid of the truck for something more practical.
The Airman first tries to sell the truck on his own but no one wants to give him the asking price. He then decides to trade the truck in at a local dealer for a car that will give him better gas mileage. Sadly, he soon learns that he is upside down in his truck (which means he owes more on his truck than what it is worth). He figures this is not an issue because the new low-mpg vehicle gets double the mpg of his truck. He is sure the car with better gas mileage will make up the difference.
Well, let's look at the scenario more closely. The car salesman tells him he will give the Airman 70 percent of what he owes on the truck. After all, the car dealer will have a hard time selling it as well. This being the case, the Airman has to come up with $8,571 to make up the difference between what he owes and what the dealer will give him to pay-off the truck. The salesman tells him "No worries, we'll just 'tack-on' the $8,571 difference to the new car loan." This process is called "rolling-over" in car sales lingo.
Surprisingly, the car salesman is able to keep the Airman's payments relatively close to what his truck payments are. "It'll only be $46 a month more than your truck payment," the car salesman boasts. The Airman does the math and figures that since his truck costs $650 a month to drive (payment and gas), the new car will only cost $546 to drive. He thinks this is a bargain because he can then realize a $104 a month savings, right? Not so fast!
Let's look at the deal a little closer. The Airman only had four more years left on his truck loan (it is a five year loan). The total cost for the loan and gas over the next four years is $38,000. More importantly, at the end of four years, he will own the truck out-right. The car on the other hand, is a six year loan (plus gas). Over the next six years, the total cost will be $39,371. Therefore, the true cost to operate the low-mpg vehicle is actually more than his low-mpg truck. Which is the better deal? You decide.
Fortunately, if you can't afford to off-load your current gas guzzler, there are a lot of relatively simple and inexpensive things you can do to save money on gas. What follows is a list ways to reduce what you pay at the pump.
· Replace a dirty air filter.
· Keep your car's engine tuned.
· Get regular oil changes and use the proper grade for your car.
· Keep tires properly inflated and rotate for even wear.
· Steer clear of gas-saving gadgets; most don't work.
· Find the cheapest gas near you at www.gasnearu.com or www.gasbuddy.com.
· Use gas-rebate credit cards.
· Keep it under 60 mph.
· Avoid jackrabbit starts.
· Lighten your load; 100 lbs can make a big difference.
· Avoid using the roof rack; objects create wind resistance.
· Use cruise control when possible.
· Limit the use of air conditioning.
· Plan errands.
· Walk or bike when possible.
For assistance with any financial matters, contact the Airman & Family Readiness Center at 963-4406.