I Just Traded in My Fuel Efficient Car for a SUV

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.

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38 Responses to I Just Traded in My Fuel Efficient Car for a SUV

  1. gene says:

    That was one of the stupidest moves that you could make. What are you going to do when gas hits $6 or $8 a gallon besides hit yourself for being so foolish?

  2. chandler says:

    I have to agree that you didn’t think things through very well. The SUV won’t keep its value nearly as well as the Honda so when it’s time to sell, you’ll lose a great deal on the depreciation of the SUV. That will wipe out any savings you may have received from the $5000 you made meaning that all the extra money you pay for gas is wasted money.

  3. kelley says:

    I too agree with your thinking. I have a SUV as well, but only drive 1 mile to work..thats both ways. I am unable to walk due to light disability. But we also have boat. Makes sense for me to have SUV. If If my employer was far away, I would not keep the SUV though.

  4. Joanna says:

    We’re getting a truck this summer too- and I’m not looking forward to paying for gas, but it will be a third vehicle and will serve many of the same purposes you listed.

    So, it’s a hard sell, but I understand.

  5. S. Shugars says:

    @ gene

    You are correct that if gas goes up in price long term that it would not be a good deal. While gas will probably rise in the short term, I don’t believe that gas will stay high in the long term. Most of the current price in gas is speculation and due to inflation of the dollar. I believe both of those will be taken care and gas prices will eventually settle below $4.

    This is a guess on my part, as nobody knows exactly what will happen. The fact that there is no oil shortage causing the current rise in price tells me that it is other factors keeping it high that will eventually resolve them self and bring the bubble down.

  6. S. Shugars says:

    @ chandler

    I have to respectfully disagree here. While it may seem that a fuel efficient car would keep it’s value better, the fact that I already got the SUV at such a bargain price means that most of the depreciation has already been taken out while hardly any depreciation was taken out of the Honda. I believe I will be able to sell the SUV at a price closer to what I bought it at than I would be able to sell the Honda in another 5 years.

  7. Lisa says:

    Its good that you took the time and thought it through. You got a vehicle that fit you and your family’s needs. Going against the crowd isn’t always easy but can pay off. I would be interested in a followup in a year or so to see if it works as you planned and if you are still happy with your choice.

  8. Annie Jones says:

    As I see it, that you have a boat you might pull with it on weekends is your only valid reason for buying the SUV.

    I understand you got a good deal on the SUV and got a good price for your Honda. But it sounds to me like you just wanted an SUV and are trying to justify the purchase.

    I say this because I drive a 2006 minivan, but we just bought an older (1997) Ford Aspire for my routine around-town driving. We’ll be using the van only when necessary, to pull our camper or when we need more space than the Aspire offers.

    Hubby drives a truck for work, so the minivan will become a mostly idle third vehicle. We should probably sell it now. But the truth of the matter is, we love it and just don’t want to get rid of it yet.

  9. Shane says:

    Congrats on the shock factor !! Don’t think you’ll find many blogs advocating buying SUVs !!

    I personally don’t agree with your line of thinking. Your SUV will cost you more on fuel – simply because it uses more. Hondas are ultra-reliable – is your SUV ? How cheap are they to repair ? Are the tyres more expensive than on a Honda ?

    If I was a millionaire, sure I’d buy a fabulous big beast of a car. However, if you are interested in saving money/spending cautiously then the only way you can justify buying a SUV is if you have too many children to fit into a normal family car in my opinion.

    But then, it’s your money – and you’ll free to prioritize your spending as your wish.

  10. aa says:

    It’s sinful to drive a SUV. Don’t be surprised if you see some middle fingers for no reason.

    All SUVs should be sent to a trash dump, basically.

  11. Chris says:

    Unless you paid $3000 total for your car, there’s still depreciation left in the value.
    I wouldn’t be surprised to find out that the net resources used and pollution produced by saving an old car from the crusher is much less than what it takes to manufacture a new car.
    I’m an advocate of saving old things and conserving dollars as much as anything else. I drive a 1995 Cadillac that I paid $2700 for, and I’m sure that it’s going to take me a lot of miles to equal the cost of depreciation that you’d see on a newer car.
    Now, if you have never opened the hood of your car or even were curious about fixing some problem for yourself, then it won’t work for you. But I am a big fan of trying to figure things out on my own, and so far, it’s worked out great.

  12. This one is sure to get alot of comments. While I can’t say that I would do the same thing, I sort of see your point. I just bought an SUV about 2.5 years ago and I sincerely regret it.

    One question that I don’t think was covered – how big is your family?

  13. ben says:

    I think this shows the importance of not listening to conventional wisdom when it comes to personal finances and running the numbers for your particular situation. People make a lot of assumptions from what they hear, but since everyone’s situation is different, there is no one right and one wrong answer for everyone. What is right for me is not necessarily right for another person.

  14. Jon says:

    @Shane – As someone who used to work for a small auto service station throughout high school, I can assure you that the myth that foreign gas miserly cars are cheaper to fix than domestic SUV’s is complete BS.

    Part for part, Honda’s and Hyundai’s parts are double and sometimes triple what Ford and Chevy SUV parts are (simple supply and demand).

    As for tires, same notion usually applies. My SO had a Hyundai Tiburon when we met and it needed tires. Due to the odd-ball size most foreign cars use, the price to put 4 new tires on her car was $200 more than the price to put 4 new tires on my truck. (another supply and demand example – common easy to get parts are always cheaper than their exotic equivalents.)

    Drive what you want because it fits your lifestyle and your budget. What works for you may not work for others but it really irks me when some people get all high and mighty about SUV’s because they drive a hybrid. In my mind that is the same as someone causing a flame war over what brand of clothes one wears.

  15. Matt says:

    Having an SUV by itself isn’t necessarily a bad thing – I drive one and as long as I keep the mileage down I have only good things to say about the car. The extra space is worth the price for me though I would like lower monthly payments trading in for something smaller might also not get me anything in the long run.

  16. S. Shugars says:

    @ SingleGuyMoney

    There are four in my family. I have two small girls. The accord was big enough, but I think the SUV will help out as they get older.

    @ shane

    I addressed that fuel will cost more. I have assumed that repairs over the next five years will be about the same as the SUV is newer than the Honda was, I don’t think I will run into problems. Again, since I don’t drive it a lot, that becomes less of an issue since I’m not putting a lot of wear and tear on the vehicle.

  17. george says:

    My only question is, what kind of car is your other vehicle? If your family already has another fuel efficient car, the SUV can just sit as the price of the raw materials go up. The SUV is a good buy only if you use it for towing the boat and transporting large goods. The SUV only becomes inefficient when you drive it with just one or two passengers. Also kudos with the biking. I assume you live somewhere where it isn’t snowing or raining 9 months of the year.

  18. cjwl says:

    You fail to mention the increased insurance premiums for an SUV over a small car.

  19. John says:

    “This is a guess on my part, as nobody knows exactly what will happen. The fact that there is no oil shortage causing the current rise in price tells me that it is other factors keeping it high that will eventually resolve them self and bring the bubble down.”

    Except that we’ve burned through about half of the recoverable world supply of oil, and oil production has peaked. Even T. Boone Pickens knows this. Prices are high and there are no lines because there is a little elasticity in demand. Oil companies would rather charge $4.00 a gallon and sell a little less than they could, than sell themselves out of product at $3.50 and create a shortage.

    You have it exactly wrong. Short term there may be a small price collapse. Long term the trend is going to be nothing but up. Think $4 a gallon is bad? Wait for $10.

  20. Roosh says:

    Or you could have sold the accord and bought an awesome bike and put away the rest of the money!

  21. Joey says:

    Why I drive an SUV (97 Landcruiser to be specific)…….

  22. angie says:

    Those are some of the most lunatic comments I’ve read in a long time. I can only conclude that most of them are jokes.

    Good job on your purchase. Although I wouldn’t say you’re ‘benefiting’ the environment for purchasing a gas guzzler. “It

  23. Pete says:

    Great, well-reasoned article. Props for not just doing the default thing but actually looking at what made sense and what your situation called for. I’m sure car buying isn’t the only area where the occasional contrarian strategy could work quite well.

  24. Curt says:

    Good idea. My brother just did that same thing. He bought a big SUV that he has wanted for years, but would have probably never been able to buy. He has 5-kids and doesn’t drive very much, so it makes a lot of sense for him. The only way I can see this being a bad idea is if we have gas rationing.

  25. John says:

    Buying a car isn’t an investment. So poo poo to all the people that are saying your move is an un-wise investment. Kudos on the thoughtful article and ripping off the seller and buyers of your old and new cars!

  26. lisa says:

    Just a question…Is an SUV any worse than a large passenger car (eg. Cadillac, Chrysler 300, Chevy Impalla, etc.? I never hear anyone bashing them. Only SUV owners.
    Just a thought.

  27. none says:

    Your decision isn’t financially sound and I believe it was made more because you were itching to make some kind of purchase and this fulfilled it. I’m guessing it will be six months before you have a navigation/dvd system in the truck to help you get to the lake, because you’ll need it for directions. Right? By the way, it’s not about financial sense that people try to make wise purchases – it is about conserving resources (and not just oil), but the fact that you have a boat that sits unused most of the time and the fact that you think cutting one trip to costco per month is a major cut in your travel shows you don’t understand that. If your Honda was underused then you should have thought about that more before you bought it. Trading it in for a truck isn’t helping anything. Had you sold the car to someone and used other means of travel, well then you’d have a case. Also, if you needed an incentive to cut your driving by making a major trade-in then you have no will power. I’m betting you don’t cut any of your driving after this trade-in. Your kind of saving advice is what got this country into so much trouble financially.

  28. S. Shugars says:

    @ none

    The SUV came with its own navigation system already so no need for me to purchase one. The boat was inherited from my father when he died. The Costco trip was one of several ways I said I believed that I will cut the number of miles I drive.

    I never said that this was what everyone should do. I looked at my particular situation and found that it made financial sense for me. I believe that is what every person should do – look at their particular financial situation and do what is right for them.

  29. Perry says:

    Congratulations for doing what suits your situation. My wife and I bartered for a one owner 89 mercury Grand Marquis wagon. We have four children, little league etc. and it suits us perfectly, since we only use it when we need to(about 100 miles/month).

    It only gets 20 MPG, but I can’t see a car payment of ANY amount offsetting the mileage gain by a newer import that would meet our needs, and it is in pristine condition.

    besides, ours has wood paneling on the doors, where can you get that nowadays?:)

  30. Pingback: Carnival of Personal Finance #158 : Vampire Slaying Edition

  31. Randy says:

    I know each person has to do what they must for their situation.

    I am now biking 4 miles to work. 1. I get about 15-20 minutes of exercise. 2. It’s cheaper than spending almost the same about of time in a car at lights, drive-thru windows (which I think are a terrible energy waste). 3. I like to think I’m doing my part to reduce oil consumption.

    I don’t think it’s just the cost to our pocket regarding SUVs and bigger than necessary vehicles. They use much more oil than a smaller car.

  32. Frances says:

    I kinda agree with him, the best part of my SUV is “Paid For”. It has over 100000 miles on its engine, never gives a moments grief. I think the “paid for” part of the car justifies its gas usage. If your car isn’t paid for it is hard to justify the gas costs in addition to the car mortgage.

  33. Allen says:

    When I first read the title, my first thought was, “What an idiot…”

    But after reading through the entire article, actually paying attention to what was written, and keeping an open mind to another viewpoint, I can honestly see how this choice could be the correct one for the author.

    I’m far from being perfect, but after reading the comments posted,
    it appears that quite a few people need to learn to be a little open-minded and alot less judgemental of others.
    hout wanting to sound condescending or anything, but it would be nice if pe

  34. Mrs. Micah says:

    First thought: Could you have gotten a good fuel-efficient car for less than your discount SUV?

    The answer is more than likely yes. So really, I don’t see why saving money on the SUV is a big deal. If it actually cost significantly less than all the other available and more fuel efficient cars (we’re not talking about awesome efficiency, just better) in your general area do…but you haven’t really demonstrated that. So I remain unconvinced. Sorry.

    Plus, Angie has an excellent point that if you aren’t going to be using it much anyway, it’s even better for the environment if you’re driving a small car.

  35. subscriber says:

    I purchased a brand new 2007 Toyoto Prius in 2006.

    The gas mileage ISN’T what Toyota promised.

    The battery died TWICE in the first year leaving me stranded far from home. They told me to use my Triple A coverage. I told them to come get the car or the newspapers would get a story. They pick it up.

    Another unfortunate consequence when the battery dies is that ALL of the doors automatically UNLOCK. Leaving my valuables vulnerable to thieves.

    Do yourself a favor and get a REGULAR small car until Toyota works out the bugs.

    I drove a Chevy Metro that got better gas mileage than this.

  36. TopWaysToSave says:

    I don’t think your idea is that far fetched. CNN had an article similar a week or so ago. It def seems like you thought out your decision which is the most important thing. I don’t think gas is gonna hit $6 or $8 per gallon. Yes you never know though. People are paying full price for fuel efficient cars and you can save thousands right now on a SUV. If you don’t drive that much i agree it can be a good economic move. Saying how you’re helping the environment might be pushing it, but I like your reasoning behind everything else.

  37. tom says:

    This is a response to lisa in post 26 about the fuel economy of the impala. I have an 03 impala in which i achieve mid 20’s in town and 32 on the highway. Thats why you havent heard anybody bashing them.

  38. Ben says:

    I just got an SUV and it rocks!

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