# Should You Dump the SUV for a Gas Sipper?

### Calculate Gas Savings When Switching Cars

Many people these days are thinking of trading in their SUV and buying a fuel-efficient car to cut fuel costs. Sure, they would save what seems like a bundle at the pump. But when you look at the big picture — total cash out of pocket — a very different situation is often revealed.

To bring this financial transition into sharper focus, Edmunds.com has created the Gas-Guzzler Trade-in Calculator. The calculator clearly reveals that there are many related costs whenever you switch from one car to another. And these costs take a long time to pay back even with the money saved on gas.

Using the Gas-Guzzler Calculator

Select the new or used vehicle you are considering buying. A series of prompts will lead to the True Market Value (TMV®) price of the vehicle. This is the average price that other people are paying for the car in your area. The user then selects the TMV price they could get by trading in their current vehicle. The calculator subtracts the trade-in value from the value of the vehicle being considered and displays the difference, or balance, between the two prices. This is the amount it would cost to make this transition.

It's important to note that in many cases it will actually cost even more than what the calculator shows. This is due to sales tax, DMV fees and related dealership fees which are always part of buying a vehicle.

Once the two vehicles are selected, all the user has to do is type in the number of miles he or she drives each month. The fuel economy of both vehicles automatically appears. (The gas mileage figures of older vehicles are automatically adjusted to the EPA's new-for-2008 methodology to make a level comparison.) A calculation is made to show how much money in gas is saved each month, and the number of months it takes to begin saving money on your fuel costs.

A Typical Example

A classic situation might be a person who wants to buy a Toyota Prius and trade in a four-year-old GMC Yukon. We ran this situation through the calculator and came up with these figures:

• The Yukon is worth \$16,090 in this market.
• The price of the Prius is \$23,903.
• The balance is \$7,813.

We put in 1,500 miles driven per month and changed the pre-populated price of gas from \$4.25 to \$4.59 per gallon. We then hit the "calculate" button and got the answer. The calculator told us that we would be saving \$312 per month in the cost of gas. However, given the fact that it would cost us at least \$7,813 to make this switch, it would take 25 months (or two years and one month) before we would begin actually saving money on gas.

A Positive Example

In some cases a person might be able to trade more evenly for a fuel-efficient car. We tried the same example with a different small car, the Honda Fit Sport with a manual transmission. In this case, the buyer actually pocketed a small amount of money by downsizing from the Yukon to the Fit (though, of course, the utility was not the same).

In this example, the gas savings were about \$237 a month. Although there was no balance to be paid off in this case, there are still the other costs — sales tax and registry fees — mentioned before that the calculator doesn't factor in.

Understanding the Results

We Americans hate high gas prices because the cost appears right in front of us, dollar by dollar. We stand at the pump with the prices spinning and a sinking feeling in our stomachs. Furthermore, we feel we are being held hostage by foreign countries that exploit our appetite for oil and then attack our way of life. These factors make gas prices an emotional subject.

However, it's important to calm down, set aside our feelings and look closely at the dollars and cents. This calculator will show that the monthly payment of a new vehicle actually dwarfs even today's high gas prices. In some cases, people who make a panicked car-buying decision could sacrifice thousands of dollars of value just to save a hundred at the pump. While they might feel better because they are getting more bang for their gas buck, their bank account is being raided by higher payments extended over a longer time period.

There are many reasons to make a change in the kind of vehicle a person drives. Some people might have strong feelings about protecting the environment or feel it is now politically incorrect to drive an SUV. These reasons, and others, don't come with a price tag and shouldn't necessarily be rejected.

Still, the gas-guzzler trade-in calculator will starkly reveal the bottom line — and that bottom line might be very different from what was initially imagined.

To find a dealership that knows how to treat shoppers right, please visit Edmunds.com's Dealer Ratings and Reviews.