Time to Buy a Gas Guzzler

by: Howard J. Ruff

Source: rufftimes.com

As the price of gas has gone up, and up, and up, our instinctive reaction is to want a cheap, small car that gets good mileage, so we can save money. Unfortunately, some of you have big families, and a small car won’t do; some of you want to be able to pull your boat or go off-road on a camping trip, and only an SUV or a pickup truck will do the job.

Right now might be the right time to buy a cheap, used gas-guzzler.

With the price of gas soaring, the price of SUVs, particularly, has been plummeting. Every dealer is overstocked with them. You can buy a typical two-year-old SUV for $3,000 or $4,000 less than you would have paid a year ago. This might be the time to buy.

The ideal situation would be to have a small gas-sipping car to drive around for shopping trips, commuting, and to put on most of your mileage. But sometimes you will want to put the whole family in the car and take a fun trip, or pull the boat to the lake, so you will need an SUV.

The ideal solution would be to have a good, used SUV to meet your needs and a small car using a lot less gas for commuting, shopping, or dropping the kids off at school, etc.

It’s a matter of simple economics. If you can save more on the price of an SUV than the extra cost of gas, it’s a simple matter of math.

Sit down and figure out the cost of the gas you would use, figuring perhaps $1.50 a gallon more than you would have paid some years ago. Figure the miles you expect to travel with the car and see what that adds up to. It may be more than the discounted price of the SUV you would buy.

If you already own a gas guzzler and are tempted to sell it, first figure out what you would get for it compared to the extra cost of gas.

So it might pay to have two cars, one to serve the purposes that only an SUV or big car can serve, and one for routine stuff that everyone does.

Start shopping the dealers, and you will be surprised how anxious they are to sell you a used car cheap. If you shop and are really tight-fisted, you will be amazed at the bargains you can get. Don’t go for a new one unless they offer you a humongous deal. But remember it’s all a matter of dollars and cents (or sense), so be sure to do the math.

Gas will go as high as $5 to $6 a gallon, so take that into account. In the meantime, have two cars – an SUV or pickup and a routine run-around-car (a Toyota Corolla, a Honda Civic, etc).

Less Miles, Cheaper Insurance

One of the few advantages to be found from higher gas prices is that people are cutting back on their driving. When they drive fewer miles, there is a good possibility they can save money on their insurance. For example, State Farm, Travelers, and Farmers clients who log less than about 7,500 miles may be eligible for mileage programs the reduce premiums an average of 10 to 12 percent. State Farm’s program earns driver discounts from 12 to 18 percent.

Consumers can save five to 15 percent,  amounting from $47 to $142 a year, based on 2000 rates by reducing the car miles by walking or using public transportation. The average annual U.S. insurance premium is $949, but if they cut the mileage enough to drop into a different ratings category, say from “drive to work,” to “pleasure driving” you can save a lot of money. Consumers should inform their agents of any big changes in their driving habits.

Since July 2007, in four states, GMAC Insurance from General Motors has offered eligible On-star subscribers who drive less than 15,000 miles, savings of up to 54 percent on their premiums, including an automatic 11 percent discount.

If you own a hybrid car, Travelers Insurance recently started offering a 10 percent discount on most coverage for owners of hybrid or other gas-savings cars in 44 states, claiming that hybrid-car owners are generally good risks. That sounds like my subscribers.

Farmers offers an average five percent discount nationally on all major coverages, including liability and property damages.

So drive less, spend less on gas, and spend less on insurance.