Could Rising Gas Prices Actually Drive New Car Sales?
I am reminded a daily basis of the seemingly dismal outlook on the economic landscape - home foreclosures on the rise again, Florida’s state unemployment at 9.9%, the volatility of the stock market…these factors seem to underscore the message that new large ticket purchases such as a new car may not prudent at this point.
Add to that the fact that I have a 6 year old SUV that is paid in full, in pretty good condition, and a vehicle that I truly enjoy driving, and I was both resigned and perfectly content with the idea that I would be one of the growing numbers of Americans that will be hanging on to their aging car for longer than I normally would. That is, until recently…well actually just last night, when my weekly stop to fill up my 2006 Mitsubishi Endeavor, set me back $82.46; an increase of over $9 per week in just the past month and up more than $15 per week since the beginning of the year.
With my debit card still reeling, I headed home to sharpen my pencil (actually, I found an app for it) and attempted to get my brain around what long term effect this added expense was going to have on my budget.
According to GasBuddy.com’s Automobile Fuel Efficiency Calculator, the additional 125k miles that I was hoping to get out of my beloved Mitsubishi, at a projected (yet, I fear realistic) gas cost of $4.25 per gallon will set me back a cool $37,946. (Pause here for audible gasp.)
In an attemptto put this into a clearer perspective, I grabbed a brochure for the Chrysler 200 (which my husband has become quite enamored with of late) that was handily laying on the coffee table and did the calculation for the same 125k miles based on its 29 MPG rating. The result? The fuel cost on that same 125k miles would be $18,315; a savings of $19,630. My conclusion? With an MSRP of $18,995 on the Chrysler 200 LX, it might be time to rethink holding on to Old Reliable and head out this weekend to take a test drive.