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With record high gasoline prices, many people are considering a more fuel efficient car.  But how do you know a new car will save you money? First figure out how much you spend on gas every month, then determine if a new car will save you enough money to justify the cost.

You can figure out how much you spend on gas every month by looking at your credit card bill or bank statement.  However, that only tells you the total amount. If you're considering buying a new vehicle based on fuel economy, you need to know more.

First let's figure out how to calculate your gas mileage and the cost of your commute, then let's figure out if you should buy a new or used vehicle for better fuel economy.

Step 1: Figure out how many miles you drive each day

You could use your odometer or trip meter but, if you're like me, you forget to check your odometer or start your trip meter.  An easy way to estimate your average miles driven per day is to use google maps.

Use the "Get Directions" tool.  Enter you starting address (usually your house) and the address of your workplace.  This will give you directions and approximate distance.  If the line drawn on the map doesn't show the actual route you take, you can use the little circles on the route to drag and drop the line to match your actual route to work.

Since I have to drop my son at daycare, I first enter the address of the daycare (you can search by the business name if you don't know the address).  Then I use the "Add Destination" link to add the gym address. Then I enter my work address.  Finally, since I take a different route home from work, I use the "Add Destination" link to add my home address as the fifth destination. This brings me full circle from home to daycare to the gym to work and home again.

The distance of my daily commute is about 11 miles.

Step 2: Figure your gas mileage

In most modern vehicles, this is pretty easy.  Usually the on board computer calculates this and displays your average fuel economy.  Both of my vehicles (which are 11 and 8 years old) have this feature.

If your vehicle doesn't calculate this for your, you'll have to do it yourself.  Here are the directions courtesy of ehow:

Step 3: Calculate Your Monthly Gas Bill

Assuming a 5 day work week, there are 260 possible working days in the year. You can add more or less based on vacation or work schedule.  Multiply 260 by the miles per day from step one.  Then divide that number by your vehicles miles per gallon from step 2. That will give you the number of gallons of gas your vehicle uses in one year. Divide that number by 12. Now you have the number of gallons of gasoline you consume in one month.

Now you have your monthly gas consumption. To compute your bill multiply your monthly gas consumption by the price of a gallon of gas. I'll assume $3.75 as that's about the price right now.

Here's my calculation for my 1997 Jeep Grand Cherokee:
11 miles per day * 260 working days = 2860 miles per year
2860 miles per year / 12 miles per gallon = 238 gallons of gas per year
238 gallons of gas per year / 12 months = 19 gallons per month
19 gallons per month * $3.75 per gallon = $71.25 per month gas bill

I spend $71.25 each month to get to daycare, the gym, and then to work and home again.  So does it make sense for me to buy a more fuel efficient vehicle?

In part 2 I'll talk about the wisdom (or lack thereof?) of buying a new car to save money on gas.  I'll run through various gas price scenarios (higher, lower and flat gas prices).

Stay tuned…

Tags    Auto    Cars    Gas    Gas Prices    Saving Money    Spending & Saving

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