When it seems that everyone wants to trade in their SUV for a more fuel efficient car, it might come as a surprise that I just purchased a SUV to replace my fuel efficient car. Although I have been told that I’m stupid for doing so, I often find that it makes financial sense to go against the crowd. After running the numbers, that is exactly the conclusion I came to.
While people seem to be focusing exclusively on gas prices, gas is only one factor in the equation for the overall value of a car. This is why it made sense for me to trade in my Honda Accord in for a SUV
SUVs are dirt cheap
Used SUVs are dirt cheap right now. When I was making calls to ask about SUVs that were for sale on Craigslist, more often than not before I got off the phone the person selling the SUV would ask, “what is your best offer?” That’s how bad it is for people trying to get rid of them. There just aren’t a lot of takers meaning that there is a wide room for negotiations and you can basically name your price since there are hundreds more SUV owners out there desperately trying to get rid of their SUVs as well. I was able to negotiate an extra $3000 off an already very low price for the SUV I ended up purchasing.
Fuel Efficient cars are selling for a premium
Everyone is looking for a car that gets 30 mpg or higher these days and if you have one, you are in a strong negotiating position when selling the car. This was especially true for me having a reliable brand (Honda Accord) that had very few miles on it for its age (2003 — under 18,000). I was able to sell my car for only several thousand dollars less than what I had paid for it due to the low mileage and the good shape I had kept it in.
I don’t drive a lot
I don’t drive very much. My office is only 5 miles from my home, so the most that I drive is 10 miles round trip, but I don’t even drive every day. Rarely do I take long trips in my car with the usual weekend trip (if there is one) being to the lake about 20 miles away. Over the last four years, I’ve averaged less than 4000 miles a year. When you don’t drive a lot, a car’s mpg has a lot less impact that if you are driving a huge amount each year.
I don’t drive unless I have to
Although I haven’t always been this way, over the last few years I have adopted a much healthier lifestyle which means biking and exercising when I can. If the weather is nice and I have plenty of time, I would much rather walk or bike to work than drive and I often do. I also like to take bike rides on the weekend rather than drive.
I will save money by driving less
The SUV should actually allow me to drive less than I currently do. The longest regular drive I have is to the nearest Costco which is about 25 miles away one way where I stock up on things about once every 10 days or so. With the larger SUV, I should be able to reduce my trips to Costco to once a month since I will have the room to carry everything back which will eliminate 2 trips each month. I also think knowing that the SUV uses more gas will encourage me to make a bigger effort to either walk or bike to work on a more regular basis.
I will save on having to rent / borrow a truck
When I want to go to the lake on weekends, I either had to borrow or rent a truck if I wanted to take our boat with us. I will no longer incur this cost as the SUV is powerful enough to take the boat.
It’s better for the environment
Although this may at first appear to be contradictory, me getting an SUV instead is actually beneficial to the environment. It’s much better that someone who doesn’t drive a lot owns a SUV than someone who does. It’s also better that someone put a lot of miles on a car that gets good gas mileage rather than one that doesn’t. If I had kept my Honda, it would have been kind of a waste for how little I was actually driving it. Better that someone that drives a lot take full advantage of it than have it sit in the garage most of the time.
In the end, I ended up getting a newer SUV (2005) that cost about $5000 less than I sold the 2003 Honda Accord for. At my current driving rate, even with the 15 mpg gas difference of the two vehicles, I will only be spending just over $1000 a year more in gas assuming $4 a gallon which means I can drive it for over four years, have all the advantages of more room and better features and still break even.
Buying a SUV is not for everyone, but if you do relatively little driving and you’re in the market for a new car, there may not be a better deal at the moment.