With the rising gas prices tons of people have been purchasing smaller more fuel efficient cars.  The problem come in that many people do not run the math in deciding whether or not to dump the old gas guzzler.  Now if you car dies it makes sense to get a more fuel efficient car, but if you are making payments or have paid the car off it gets a lot more complicated.  Through listening to Clark Howard on the radio I was turned onto the Political Calculations website.  The link goes straight to a calculator that will let you know whether it is wise mathematically to trade in your gas guzzler.  It even gives you a link to determine the operating costs of just about every car running on American roads.

After playing around with the calculator for a while I was able to determine that it pretty much does not make sense to to trade in a vehicle that is paid for if you are going to have to make payments on the new vehicle.  Even if this saves you a lot of gasoline it will not offset the cost of the payments.  Here is what I filled in to get the new car to be equal to the old car in cost per month, assuming the old car was paid off.

Total miles for the year: 20k

Cost for Gasoline : $5/gallon — I know this is high but I wanted to see what effect the cost of gasoline really had on the equation

Miles per Gallon:  Old- hwy 17 city12  New – hwy 35 city 26

Monthly payment: 378 – this is the average car payment in America

Semi annual insurance- Old $500  New $650

Montly Maitenance Cost – Old $180  New $90

This extreme situation made the two come out to within one penny of each other on a monthly expense basis.  This means, that if you are done with payments, the cost of running that vehicle is so low that it only makes sense mathematically to run the puppy till it dies.  Sure she has a few dings and then engine makes a growling sound similar to a bear, but those little traits just give her character.  Most of all she’s still saving you a bundle over that sleek newer model with the high gas mileage.