Attitudes in personal finance.
I have my opinions about unneccessary use of SUVs for image purposes, but the following is completely free of any personal pointed judgements about car manufacturers, people who drive SUVs in general, or environmental impact or anything else. The topic is specifically about the personal finance situations some SUV owners are finding themselves in these days & the problem I see in some commentaries urging people that they’ll lose money by trading in their gas guzzling mammoth vehicles.
I’ve been reading these articles recently about the SUV falling out of favour because of higher fuel prices. Naturally more of the new cars being purchased now for basic work commute needs are more fuel efficient cars. It makes sense, for people already in the market for a new car, in light of recent oil prices, to pass on a big vehicle if they don’t really need it. But I’ve also been reading a lot of commentaries that suggest that it’s NOT a wise move to trade in your gas guzzler just to get a fuel-efficient car. In essense, articles like “The Burns family debates whether to ditch the SUV” and “Should You Trade in Your SUV for a Fuel-Efficient Car?” are advising people who already have inefficient vehicles, to keep on driving them.
But one thing missing from each & every commentary I’ve found on this subject – where people are urged not to trade-in their inefficient vehicles – is the possibility of getting a used, older, fuel-efficient car. All of these commentaries assume anyone interested in trading in their economic liability is going to run out & buy a brand spanking new car – and lose big in the process. That’s just not the case. Or at least it shouldn’t be for any rational person who is really considering taking a hit on the value of their car in order to economize. I’m pretty sure the gazillionaires who drive Hummers for fun aren’t the ones looking to downsize for fuel efficiency. Even if they want to save on road trips, they could afford to buy a Honda Civic, and keep their prized 5-ton vehicle for being seen tooling around town. I regularly hear of people saying that they love their SUVs, and they wouldn’t get rid of them “even if gasoline hits $10 per gallon”… Because, I assume, apparently they can afford it. (Or they feel/believe that they can.) No, most of the people who are looking to downsize for economic reasons are people who are already hurting from gasoline prices. (Or at least they worry about hurting in the near future.) And I think it’s sad if people aren’t looking further into the math, because they’re told it wouldn’t be worth it to trade in their money pisser, and continue to let the vehicle bleed them into bankrupcy court. Just because they really want to believe that keeping their SUV as a commuter vehicle is the sensible choice. So they look no further than, ‘See, it wouldn’t be worth it to switch anyway.’
I used the calculator to do a little experiment with the Gas Mileage Savings Calculator: Car Cost vs. Fuel Savings – I’m no economist nor financial advisor, I don’t have a degree in accounting… But I’m frugal and I know how to budget. Maybe there’s some flaws in my calculations, but I’m really thinking people are missing the obvious. Downsizing to a used car that gets better gas mileage saves money.
The unavoidable human psychological factor is why it bothers me that all these financial experts keep pushing this general idea that downsizing is a bad bet for any SUV owners, when that’s simply not the case. Sure, if every SUV owner absolutely insists on driving, if not an SUV, then some other image of wealth that just happens to get better gas mileage, then yeah, those commentaries make sense. But in the real world, where formerly wealthy people, middle class people, and regular joes who thought themselves wealthy, are heading into credit nightmares & mortgage disasters, with no relief in sight, that kind of generalization just doesn’t wash. And I find it troubling that little old shoe-string budget 17 year old car driving me is seeing logic that so-called financial experts seem completely oblivious to. Is our culture’s group psychology really so irrational that the thought of going older when buying another car is so unthinkable that even financial experts feel compelled to ‘enable the denial’? I guess this is the kind of thing that anthropologists have a field day with years later.