Introduction: Small Changes to Save Big... $57,000 (Automotive)
Before we start. Yes, that is my cat...
Now that we got that out of the way, lets move on to the $$Money$$...
JUST THINK ABOUT THIS: One of the LARGEST debts in each household is something we use the LEAST! We only spend about 7% of our time in our vehicles!
DOES THIS MAKE ANY SENSE TO YOU?
How would you feel about getting a paycheck, taking a large chunk of it approximately 1/3 of it every month, then handing it to a very rich person so they don't have to work or have to work very little?
Your giving them your hard earned money so they can go on lavish vacations with their families, to private Islands on private planes, buy expensive toys, throw parties for their other rich friends and send their kids to private schools.
How does that make you feel?
Cause that's what your doing right now as we speak!
The 4 biggest consumer debts (3 of which I CAN'T help you with because I have never and WILL NEVER even think about touching them) in the United States are
In order 1.) Pay day advances 2.) Small business loans 3.) Farm Loans 4.) Auto loan debt - (This one I WILL help you with)
Seriously look it up! We are buried in debt in this country.
Here are some easy tips to follow to save close to $57,000 on you vehicle.
I will do the math on this short term as well as long term so that you're not thinking "Well its not that much". Because that old "a penny saved is a penny earned" is falling by the way side and it's painfully true that every dollar counts.
Short sided thinking is why you, and the world around us is broke!
So READ CAREFULLY and PAY ATTENTION TO THE DETAILS. While your doing this think about how it may fit into your life and how you can make trade-offs.
Is $57,000 in your bank account worth driving a Toyota Prius, Toyota highlander, a Chevy Volt, a Nissan Leaf, Toyota Camry, Honda Insight, Pontiac Vibe, Chevy Equinox, Hyundai Sanata, Ford Eco-boost, BMW 328, Honda CRV, Tesla roadster, Audi A3 TDI, Porsche Panamera S Hybrid, Ford Fusion, Ram 1500 with Stop Start, Volkswagen Gulf Sport TDI, Ford Focus Electric, Lexus NX200T, Infinity Q50, BMX I3 or basically any up and coming Volvo.. Plus a bunch more.
You need to carefully weight how you drive, where you drive, what your payload is and weigh cost to fuel economy. Then figure out if all electric, Hybrid, Stop Start technology or just a plain old boring fuel efficiency vehicle will be right for you.
Trust me there is a sweet spot for everyone! I don't expect a contractor to be driving a Nissan Leaf to be pulling a fully loaded trailer from job site to job site.
But we also don't need a soccer mom with 1 maybe 2 kids who are in school all day while mom runs errands driving a GMC Yukon XL getting only 16 MPG city.
I'll break this down over 9 steps and sum it up on step 10 giving you the total savings if you work the system right!
Step 1: Sell Your Car (Saving $940.80 Per Year)
Get rid of your low fuel efficiency car!
Average driving of 12,000 miles per year at 24 mpg. Fuel cost at $2.45
12,000 ÷ 24 mpg = 500 gal x $2.45 per year $1,225
Upgrade to a low avrage 50-60 mpg car. 12,000 × 50 mpg = 240 x $2.45 = $588
A savings of:
$559 per year per vehicle
or $5,880 over 10 years per vehicle
Think about it... 16 gal to go 350 miles vs. 9 gal to go 655 miles.... makes since right?
Now lets be realistic! Most people fill up once a week! So lets break that down!
16 gal per week 852 gal per year average x $2.45 = $2,087.40 per year
9 gal per week 468 gal per year average x $2.45 = $1,146.60
$2087.40 - $1146.60 = $940.80 savings for the fuel efficient vehicle each year.
or
$9,408 in 10 years
This is not taking into account the thousands upon thousands of dollars of repairs that a non fuel efficient vehicle needs that a hybrid or high fuel efficient vehicle will never need.
Step 2: No Debt (Saving $1,014.93 Per Year)
Vehicles are a depreciating assett. The second you drive them off the lot they loose value. Every time you drive a mile they loose value.
Basically cars are a nessisary evil for most of us but are basically a loss.
I did a quick goggle search and found these results.
Average auto cost: $33,560
Average intreste Rate 8.56% on previously owned and 4.46% on new cars on 68 mo. loans (new average).
The average interest rate of the above is 6.51% This is the number we will use and to make things easy we will go back to 60 months (5 years).
HERE IS THE KICKER: AUTO LOANS ARE AMORTIZED AND GENERATE INTEREST MONTHLY!
Now considering most people do the sign and drive crap with no money down (This will cost you ass tons of money in the long run) and somewhat smart people do 20% down. So lets just round that off at $1,500 down for your vehicle for an average.
This means the front half of your loan is almost all interest. Virtual no money goes to principal.
An average well qualified car payment is $503 mo. But lets face it most people aren't well qualified buyers!
That makes an average car payment in America $627.44
Average Tax $2,011.80
With an initial loan principal of $32,060 because you put $1,500 down you will pay $5,586.45 in interest over your 5 year loan. so a grand total of $39,146.46. Plus $2,011.80 = $41,158.26
Plus Title and Licence, depreciated value and insurance costs. We will leave that out of this equasion for now as thoes numbers may vary widely.
Since you can afford a $627.44 payment per month why don't you save that same payment for 60 months and save the $627.44 per month = $37,646.40 and just pay cash for the $33,560 vehicle and pocket the rest of the $5,586.46 (interest that would have been paid on a loan) minus sales tax at $2,011.80 = $3,574.66 + $1,500 (down payment you didnt have to pay)= $5,074.66 Cold hard cash in your pocket.
Now that your 60 mo. (5 years) is up with that car you're going repeat that process like everyone else right? so lets just assume your looking at 10 years ( 2 vehicles )
Your looking at a savings of $1,014.93
or
$10,149.32 over 10 years.
(The sad thing is this is usually x2 as almost every household in America has 2 vehicles or 4 vehicles over 10 years)
This means the average depreciated value of your $33,560 vehicle is now worth $13,219.32 meaning YOU LOST $20,340.68!
What other investment would you be willing to throw away $20,000? NONE!
This does not factor in the trade in values or the roll in cost onto your second loan if you didn't pay your first loan off completely.
And YES, you still need to pay the remaining balance of your old loan it gets rolled into your new loan.
This is why dealerships make money! You pay for both loans maybe they give you a fraction of a kick back called trade in value then roll that trade in value back into the used car YOU JUST GAVE TO THEM (NOT SOLD TO THEM. Remember you're still paying for a car that they now own on your next loan) and the dealership now gets to mark it up and sell it to somebody else to repeat the process.
To sum this step up: LOANS ARE STUPID! PAY CASH FOR EVERYTHING!
Many of you might be asking how did I do this?
Well I made a 5 year plan to get out from under an old auto loan, much like YOU have today, on a vehicle I no longer owned.
So I bought and drove a crap car that I payed $1,200, for 5 years. Saved what my loan payment would be cause I didn't want to pull any money out of my savings ($200 per month or $2,400 per year x 5 years $12,000 this is called budgeting. (I know it's and adult thing, but someday you will learn the ways of the force), sold it for $900 so basically rented it for $300 for 5 years or $60 per year or $5 per month.
I payed $11,000- $900 (I sold my last car for) = $10,100 for a used, low mile well maintained 2011 Prius and will be able to sell it in 5 years for around $9,000 meaning I basically rented this car for $1,100 for 5 years or $220 per year or $18.33 per month which well pays for its self in fuel alone meaning I am more or less MAKING MONEY OFF OF MY CAR!
Plus we budgeted for the car for $12,000 and only ended up spending $10,100 so I saved enough right out of the gate which basically payed for the $1,943.24 in taxes.
Factor in the savings from step 1 and in one year my car made me and will continue to make me $940 per year! at this point THIS IS AN INVESTMENT! And this is only step 2!
Step 3: Flling Up Tips Part 1 (Saving $306.25 Per Year)
So here are the basics
1. Fill up your car or truck in the morning when the temperature is still cool. Remember that all service stations have their storage tanks buried below ground; and the colder the ground, the denser the gasoline. When it gets warmer gasoline expands, so if you’re filling up in the afternoon or in the evening, what should be a gallon is not exactly a gallon. In the petroleum business, the specific gravity and temperature of the fuel (gasoline, diesel, jet fuel, ethanol and other petroleum products) are significant. Every truckload that we load is temperature-compensated so that the indicated gallonage is actually the amount pumped. A one-degree rise in temperature is a big deal for businesses, but service stations don’t have temperature compensation at their pumps.
2. If a tanker truck is filling the station’s tank at the time you want to buy gas, do not fill up; most likely dirt and sludge in the tank is being stirred up when gas is being delivered, and you might be transferring that dirt from the bottom of their tank into your car’s tank.
3. Fill up when your gas tank is half-full (or half-empty), because the more gas you have in your tank the less air there is and gasoline evaporates rapidly, especially when it’s warm. (Gasoline storage tanks have an internal floating ‘roof’ membrane to act as a barrier between the gas and the atmosphere, thereby minimizing evaporation.)
4. If you look at the trigger you’ll see that it has three delivery settings: slow, medium and high. (fuel companies are gettimg smart and removing this slow setting) When you’re filling up do not squeeze the trigger of the nozzle to the high setting. You should be pumping at the slow setting (if removed and the pump has only 2 settings hold the handle approximatly where the first settinh should be), thereby minimizing vapors created while you are pumping. Hoses at the pump are corrugated; the corrugations act as a return path for vapor recovery from gas that already has been metered. If you are pumping at the high setting, the agitated gasoline contains more vapor, which is being sucked back into the underground tank so you’re getting less gas for your money.
5. Once you hear the first click of the gas pump, did you know any gas you pump after that isn’t going into your car’s tank? You’re actually paying for gas that is filling up the hose, ready to be pumped into the next customer’s car. Any additional gas you try to pump into your tank may be drawn into the vapor line and fed back into the station’s storage tanks and can ruin your car. Have you ever wondered why your vehicle won’t allow you to add more gas once you’ve been alerted that your tank is full? Because gasoline needs room to expand, your tank needs extra room for that expansion. If you try to top off, the extra gas you’re trying to add may actually evaporate into your vehicle’s vapor collection system. This can ruin the mechanism, making it work improperly, and cause your car to run less efficiently.
So the math the average milage per vehicle is 12,000 per year ÷ 24 mpg = 500 gal per year x $2.45 per gal = $1,225.
Following these steps above could save you up to 25% per year on fuel costs!
$1,225 × 25% = $306.25 per year per vehicle.
or
$3,062.50 in 10 years per vehicle
Not to mention costly repairs!
Step 4: Filling Up Tips Part 2 (Saving $2,305.58 Per Year)
Work the system.
Not joking!
Safeway and Kroger both have points off, 1 point for every dollar you spend. 100 points for .$10 off, in some cases 2x points or even 4x off when you buy gift cards or fill your perceptions.
You would only need to spend $250 to get $1.00 off at the pump with the 4x gift cards.
I'm sure you have more than that in bills each month!
If you're shopping buy prepaid visa or mastercard gift cards get $1.00 off at the pump.
Then use that gift card to buy the fuel you just saved $1.00 per gal on, pay your utility's, have a nice night out with all the money you're gonna save or just throw it in a drawer and use it as a savings account to remodel the house like I do.
After that use that card to grocery shop to get those points up for more money off at the pump and what ever is left use that to buy more gift cards to get more money off at the pump!
Hell, get Lowes, Home Depot, Olive Garden, Regal, Chillies, Amazon, Google Play gift cards... Where ever you shop or eat!
If the average fuel cost is $2.45 per gal it makes your cost $1.45.
Average tank is 16 gal... Saving you $1.00 per gal or $16 per tank -or- in the more fuel efficient vehicle 9 gal tank = $9 per tank
Remember the math on the step 1?
An average person uses 500 gal per year so a quick $500 in your pocket!
Now to save more! You're allotted up to 25 gal per fill up at Safeway and 35 gallons at Kroger!
Lets just base this off of the 25 gallons! even though another 10 gallons makes a huge difference!
Buy some 5 Gal fuel tanks!
With a 16 gal tank you will come home with an extra 9 gal of fuel. Adding another $9 of savings.
Getting you to that $25 worth of savings. Plus an extra half tank for next week. Saving you another 8 gal of fuel for next week or $2.45 x 8 gal =$19.60 + $25 = $44.60 for every one and a half weeks.
To break that down 52 weeks in a year / 1.5 weeks of fuel = 34.67 weeks. 34.67 x $44.60 = $1,546.28 per year!
or
$15,462.80 over 10 years
With a more fuel effects vehicle you're again save up to $25 but will come home with almost another 2 tanks of fuel.
This leaves 16 gal of fuel in your garage @ 50 mpg (low average) or 800 miles.
If you fill up your fuel efficient vehicle once a week this gives you 2.7 weeks of extra fuel (With the 9 gal in your tank thats 1,250 miles with one fill up!).
$2.45 x 16 gal =$39.20 + $25 = $64.20 Savings for every 2.7 weeks.
To break that down 52 weeks in a year / 2.7 weeks of fuel = 19.25 weeks. 19.25 x $64.20 = $1,235.85 per year!
Now remember savings is less on the more fuel efficient vehicle happens because you are buying less fuel.
That is saving you $310.43 (The difference the non fuel efficient vehicle and the fuel efficient vehicle) ou dont even see per year on top of that $1,235.85 + $310.43 = $1,546.28 plus the extra 9.96 gal of fuel saved each week at $2.45 per gal = $14.60 per week × 52 = $759.30 + $1,546.28 = $2,305.58 per year
or
$23,055.80 in 10 years
Remember I'm just being conservitive. You can save way more if you get the extra 10 gallons at Kroger!
Step 5: Do Your Own Repairs ((Within Reason) Saving $48 Per Year))
Do your own oil change, rotate your tires, drain and fill transmission, check for leaks etc...
A typical oil change (non synthetic) will run you about $20 plus taxes and fees.
Not a bad deal, but being a Tech myself, we all know they are gonna find a million things to sell you on that don't need to be done.
Now non synthetic oil will run you about $12.00 for 5 qt and a filter will run you $5.00 which already saves you about $3.00 plus prevents you from getting hassled at a repair shop.
With average 4 oil changes per year you save another $12 or $48 per year
$480 over 10 years
A synthetic oil change is about $50 at a repair shop.
Synthetic oil is about $25 and a filter is about $5 =$30 saving you $20 per vehicle
or $200 in 10 years per vehicle
Synthetic oil needs to be changed every 10,000 miles or so. which basically puts you at the same $30 for the year.
Switch to synthetic and save an extra $18 per year on top of that $30.
$48 per year per vehicle
or
$480 over 10 years per vehicle
The average household has 2 so make that $96 per year
or $960 over 10 years
This will basically save time and help your engine plus gives you the opportunity to look around for random leaks not having a repair shop tell you something is wrong when it isn't both of which saves money in the long run.
Step 6: Carpool (Saving $637 Per Year)
So you have 2 vehicles? Awesome so does rest of America...
Lets look at carpooling!
If you estimate that most people drive round trip to work about 20 miles each day and that many cars use about a gallon of fuel per 20 miles, if you carpool with just one other person for a full year, you would save 260 gallons of fuel.
260 x $2.45 per gal = $637 per year
or
$6,370 over ten years
So stop being so entilted and drop your damn spouse off at work or grab a co-worker and split fuel and save some cash!
Hell if you can work it right, or work the system right like I showed you in step 4 you might even make money to drive to work every day!
Step 7: Emissions (Saving $12.50 Per Year)
Non fuel efficient vehicles require emissions every 2 years depending on the state your in.
The average emission cost every 2 years is $25
Fuel efficient never require emissions thus saving you $25 ÷ 2 years = $12.50 per year
or
$125 over 10 years.
Step 8: Windows Vs. A/C (Saving $122.50 Per Year)
Auto experts from Edmunds.com and the Society of Automotive Engineers (SAE) have run tests to see which strategy -- windows up, AC on or windows down, AC off -- yields better mileage.
In an oft-cited SAE study from 2004, engineers compared two large vehicles' fuel efficiency -- an SUV with an 8.1 liter, 8-cylinder engine, and a sedan with a 4.6 liter, 8-cylinder engine -- under each driving condition at low, medium and high speeds.
Both vehicles got the best gas mileage when their AC was off and the windows were rolled up (this is, of course, only an option on cooler days). When the windows were rolled down, fuel efficiency dropped, especially for the sedan with lower drag -- it didn't affect the SUV as much, because the SUV already had a lot of air drag. And when the air-conditioning was turned on and the windows rolled up, fuel efficiency was at its worst, despite the vehicles' big engines.
The folks at Edmunds.com were surprised when they found similar results with a pickup truck, which got almost 10% better gas mileage with the windows down and the AC off when driving at 65 mph. Edmunds noted, "the air-conditioner produced a measurable drain on the engine and a resulting drop in fuel economy ... [perhaps because] the aerodynamic qualities of trucks are more similar to a brick wall than a sedan."
Finally, a survey from Consumer Reports revealed that, overall, "Running an air conditioner at 65 mph can reduce your fuel mileage by about 1 mpg and possibly more if you drive faster."
It's unfortunate that the SAE test didn't include smaller cars with lighter 4-cylinder engines, that the Edmunds test didn't examine a range of vehicles under different driving conditions, and that Consumer Reports doesn't have more detailed info. Hopefully we'll see some better research in the near future, but in the meantime ...
Gas Mileage and AC: What You Can Do in Warm-Weather Driving: Simply put, running the air-conditioner always reduces gas mileage. Always -- at least according to the experts.
So, the most common-sense advice is to drive with the air-conditioning off and the windows open whenever possible, especially in stop-and-go city driving. Cracking a few windows and putting your car's fan on high -- without running the AC -- will usually help you stay comfortable by moving air through the vehicle on warmer days.
When you're going on a long, high-speed freeway trip, it might be quieter and more comfortable to roll up the windows and turn on the AC -- though that will inevitably bring down your MPG. In particular, cars with smaller 4-cylinder engines usually get much better mileage with the AC off, even at highway speeds with one or two windows open. And in any vehicle moving at highway speeds, cracking a window a few inches will usually provide plenty of airflow without increasing drag significantly.
Of course, it also helps to dress for the weather -- it's nearly impossible to keep your cool when you're wearing a wool business suit and a necktie during a heat wave.
The best way to figure out what works best for your car is to try each situation yourself, since vehicles are all different -- what saves gas in a Mini Cooper might not be the most fuel-efficient strategy for a Cadillac Escalade.
After quite a bit of research I found the above study. It had the lowest percentage results most claims savings up to 20% which seemed high to me so lets go with the 10% in this study.
$1,225 × 10% = $122.50 per year per vehicle.
or
$1,225 in 10 years per vehicle
For the Fuel Efficient Hybrid vehicle.
In low speed situations windows down is the best.
In short high speed situations 2 windows cracked 4" is best (flow through).
On longer trips AC is the best option and definitely more comfortable. You only take "the big hit" for a short period while the batteries cool. During that time the MPG settles to about a 2 MPG (still more of a hit then the flow through method). Once the batteries cool aerodynamics take over and kick the MPG back to normal fuel economy
The benefit of cooling with the A/C on longer high speed trips is keeping the hybrid battery cool. When the Hybrid battery gets too hot it's not as efficient/helpful and may loose as much as 15% fuel efficiency.
Thus driving with the A/C on in a Hybrid is only an average 5.1% loss on fuel economy.
Considering this isn't verified lets just assume the 10% loss of fuel economy for the Fuel Efficient Vehicle as well.
Step 9: Driving Habits (Saving $245 Per Year)
Plan your trips. Keep lists of needs that will require a trip and try to accomplish multiple objectives with each.
Lighten your load. Get the lightest car that will serve your needs. Weight is one of the biggest causes for loss of kinetic energy in non hybrid cars.
When you fill up with gas, fill up halfway and try to keep your tank above one-quarter. If your fuel runs low, you could put stress on the fuel pump.
Mind excess weight in your vehicle such as the kids toys, tools, trash, boxes etc. 10 gallons only adds 60 pounds of weight. Misc objects in your vehicle may add up to well over 100 lbs.
Slow down. The faster you move, the harder your engine has to work to push through the wind. Speeding can reduce fuel efficiency by up to 33%.
Use cruise control. In most situations, using your cruise control reduces fuel consumption by maintaining a constant speed. (Does not apply to a Hybrid. Use the pulse and glide method on any Hybrid vehicle.)
Accelerate smoothly with moderate throttle. Engines are most efficient with moderately high air flow (throttle) and at revolutions per minute (RPM)s up to their power peak (for small to mid-sized engines this is generally somewhere between 4k to 5k RPM). (Does not apply to Hybrid Vehicles. Use EV or BATT modes where applicable for acceleration to 25 MPH. Then apply approx. 3/4 throttle after 25 MPH keeping the throttle above "ECO" without accelerating into the "POWER" bar to quickly accelerate to speed. The faster you can get to speed the quicker you can switch back to battery or battery/fuel combo.)
Plan your route carefully. Take the route with the fewest stops and turns and least traffic.
Avoid braking wherever possible. Braking wastes energy from fuel that you have already burned, and accelerating after braking consumes more fuel than driving at a constant speed.
Avoid excessive idling. Idling a vehicle wastes a significant amount of fuel. Consider a hybrid vehicle which shuts off the engine when the vehicle is coasting, gliding or stopped.
These steps may add up to over 20% saving in fuel consumption.
Following these steps above could save you up to 20% per year on fuel costs!
$1,225 × 20% = $245 per year per vehicle.
or
$2,450 in 10 years per vehicle
Step 10: Break Down
Step 1
Non Fuel Efficient Vehicle
Per year N/A
10 years N/A
Fuel Efficient Vehicle
Per year $940.80
10 years $9,408.00
Step 2
Non Fuel Efficient Vehicle
Per year $1,014.93
10 years $10,149.32
Fuel Efficient Vehicle
Per year $1,014.93
10 years $10,149.32
Step 3
Non Fuel Efficient Vehicle
Per year $306.25
10 years $3,062.50
Fuel Efficient Vehicle
Per year $306.25
10 years $3,062.50
Step 4
Non Fuel Efficient Vehicle
Per year $1,546.28
10 years $15,462.80
Fuel Efficient Vehicle
Per year $2,305.58
10 years $23,055.80
Step 5
Non Fuel Efficient Vehicle
Per year $48
10 years $480
Fuel Efficient Vehicle
Per year $48
10 years $480
Step 6
Non Fuel Efficient Vehicle
Per year $637
10 years $6,370
Fuel Efficient Vehicle
Per year $637
10 years $6,370
Step 7
Non Fuel Efficient Vehicle
Per year N/A
10 years N/A
Fuel Efficient Vehicle
Per year $12.50
10 years $125
Step 8
Non Fuel Efficient Vehicle
Per year $122.50
10 years $1,225.00
Fuel Efficient Vehicle
Per year $122.50
10 years $1,225.00
Step 9
Non Fuel Efficient Vehicle
Per year $245
10 years $2,450
Fuel Efficient Vehicle
Per year $245
10 years $2,450
TOTAL SAVINGS
Non Fuel Efficient Vehicle
Per year $3,919.92
10 years $39,199.2
Fuel Efficient Vehicle
Per year $5,632.56
10 years $56,325.60
