 Triple A predicts gas will be $4.00 per gallon by Summer 2008. This means gas has literally doubled the last few years - and there is no reason to believe it can't double in the coming 2-3 years. High mileage cars such as Hybrids, Sub Compacts and the electric GEM are becoming the most requested cars in leasing history. The market is exploding. This explosion gives dealers and other leasing companies an opportunity to maintain a higher than predicted profit on these models. Any of you there for the energy crisis during the Carter administration probably remember how gas guzzler sales dropped and imports dominated the market. There were Honda dealerships that had no cars and pre-sold them from only a brochure which they were hesitant to hand out because demand for them exceeded printing and delivery supplies. Those times are knocking at our door again. However, this is no time to panic and if you play it smart you can actually come out ahead after the "rush" to buy low mileage cars is over. We are witnessing a dramatic fall in profit margins for average and high average fuel usage cars and trucks. With prices (in many cases) dropping ten thousand dollars or more... on certain models you would have to buy twenty thousand gallons of gas before you were break even on the cost difference of a high mileage car and a low mileage car. That equates to almost 12 years of driving before the high mileage vehicle covers the cost difference in a lower mileage vehicle. With this in mind, you could drive a vehicle that gets 20 mpg for four years and save thousands of dollars over what it would have cost you to drive a 40 mpg vehicle the same period. Confused?Let's say gas is $4.00 per gallon.
Let's say the average residual (future value) of both cars is 50%.
Let's say you drive 15,000 miles per year.
So at 40 mpg that's 375 gallons of gas per year. Times four dollars $1500
At 20 mpg that's 750 gallons of gas per year. Times four dollar $3000
Over four years the 20mpg car cost you $6,000 more to drive.
However, the Honda Hybrid (example) cost you $2000 over sticker so you paid $35k. The Cadillac DeVille Cost you $10,000 back of sticker so you paid $25,000. After 4 years of fuel the Cadillac was actually $4000 cheaper over the period of time and your payment was almost a hundred dollars less. That adds another $4800 to the term making the Cadillac a total of $8800 less money to operate and than the Honda Hybrid. Don't get roped into paying more. if you want to pay more to drive what you want... then fine. But do not be duped or scared into a high mpg car or truck because you think it is going to save you money.
Most makes and models can be leased when preowned or used
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