New vehicles on the market today can have MPG ratings of anywhere from 12 MPG for a large pickup truck all the way up to 48 MPG for a Toyota Prius. If you're a typical American driver then you log 12,000 miles on the road each year. At $3.25 per gallon that means the cost difference between that big truck and the Prius is $3,250 versus $812.50 per year. Thats a $2,437.50 potential annual savings difference.
I know that some of you have a need a 4WD pickup with V8 engine cause you work construction and you need to haul things. Or you may want a large SUV because you have 4 kids and you frequently haul them and their friends around town. So a Prius or similar smaller vehicle may be impractical for your needs. But you might want to challenge those thoughts to be sure you're making the right financial choice. Do you really use your pickup to haul stuff frequently or could you instead buy a car and occasionally rent a uhaul to haul items if needed or have things delivered? And does your family size really warrant a large vehicle? I'm sure some of us could live just fine with other vehicles and we don't necessarily need the biggest pickup or SUV. Look at it this way: What is more important, having more hauling capacity or saving $1000-2000 a year in gasoline?
Still, I'm sure many people with larger vehicles do have a practical need for them. But you can still save money on gas based on your choice of vehicle. If you have a need for a pickup then consider a 2WD over a 4WD. Most of us don't have any use for 4WD most of the time and 4WD vehicles get lower mileage. If you need to haul a lot of people then consider something like a hybrid SUV. The Toyota Highlander hybrid seats 7 and gets 27 MPG city and would save you $1156 a year in gas over a typical 15MPG SUV.
But I still realize larger vehicles are necessary for many of us. So I would at least recommend comparing vehicles within your class and look for better MPG. The governments Fueleconomy.gov site has a page to search for MPG by vehicle class. So you can go there and compare MPG among pickups or SUVs or family sedans. For example : 4 wheel drive trucks range from 12MPG to 17MPG city. Thats a $2294 to $3250 range or as much as $955 annual difference. Or if looking at family sedans the range is 15MPG up to 48MPG for the Prius. With an annual range of $812.5 to $2600 or annual difference of $1787.50.
Generally I wouldn't recommend buying a brand new car given the high depreciation within the first 1-2 years of vehicle ownership. Heres a page with a list of high MPG newer model used vehicles. Or if money is especially tight then I'd recommend looking for a decent '90's cars like a1995 Geo Metro 37MPG city / 44 highway or 1995 Honda Civic 35 city/41 highway.
Furthermore keep in mind that the amount you save on gas will benefit you every year that you own the vehicle. While we can't predict the future, its quite likely that gas prices will remain high in future years. Lets say you're comparing a Toyota Camry to a Toyota Prius and expect to keep the car for 5 years. The 2008 Camry CE retails for $18,570 and gets 25mpg average while the Prius retails for $21,100 and its mileage is 46 mpg. If you drive 12k miles and gas costs $3 then the Camry will cost $1440 a year in gas and the Prius would be $782. Thats a $658 annual savings per year or $3290 over 5 years. That more than make up for the cost $2,530 differential between the two models.
April 30, 2008
How to save on gas #2 - efficient cars
April 29, 2008
How to save some money on gas #1
The first set of tips is : Driving more efficiently
Next they recommend that you : Keeping your car in shape
Things you can do to keep your car in shape and the possible savings are:
Now I'm sure that most of us can't benefit the maximum % from most of these items. But some of us can probably stand to improve a few of these items.
A typical American drives 12,000 miles a year and their car gets 20 MPG. So if gasoline is $3.50 a gallon then typical Americans spend $2,100 a year on gas. (12000/20 * 3.5)
If you increased your MPG by just 10% then you'd lower that cost to $1,909 (12000/22 *3.5) and save yourself $191 per year on gas.
April 25, 2008
PaperbackSwap and cheaper alternatives
I've seen a bit about PaperBackSwap.com lately. Its a nice idea for sure. Using the service individuals can trade books with other individuals and just pay the cost of postage. There's no fee for the site involved. The website keeps track of it and gives you a credit for shipping a book to someone which you can use to request a book from someone else. They have over 2 million books available from members to trade. Overall its a pretty nice idea. BUT postage costs in the $1.50 $2.25 range to mail a book. So if you add this in then you're basically trading 1 book for 1 book + $2. Due to the postage costs I believe this isn't a particularly frugal option. There are a lot of ways to get books cheaper.
Here are some ideas for getting used books cheaply..
Use the local library and buy at library sales
The library is a great resource for books. The biggest advantage the library has of course is that the books are free to borrow. Of course you can only borrow books for a limited time, though you might be able to extend the deadline. If you're not good about returning books on time it can also cost you late fees.
Libraries or organizations that support the local library may have a book sale of either library discards, general used books or both. These can be great bargains for books with lots of selection and low prices. You can often get books for $0.50 to $1 at these sales and they may have deals like stuffing a paper sack full of books for $5. Try looking at the site Book Sale Finder to locate book sales near you. These sales aren't frequent though and are often only held annually. My fiancée and I visited such a library book sale this past weekend and bought about 20 books for $20.50 and about $7 gas money or $1.37 per book plus we had fun doing so.
Buy bulk lot of books on eBay
Go to the eBay category for books and then search for your favorite author and the keyword 'lot' for example if you like Stephen King then search for "stephen king lot" or if you have a genre of writing you enjoy you can tray a search for that topic name. Like if you enjoy romance books then you can do a search for 'romance lot'. Once you get the search results then sort them by 'Time: ending soonest". This generally works best for the more popular authors or genres and some books are more or less expensive on eBay depending on availability and popularity. I tried this for Stephen King as an example and I came up with an auction of 6 books going for $0.99 and $8.95 shipping which comes out to $1.66 per book. Keep in mind when you're looking on eBay you should check out the sellers feedback rating and add in the shipping and handling fees to the costs.
Trade and buy at used book stores
Used book stores will often have a trade system where you can trade in your used books for credit or a 2-for-1 trade system. So for example at my local used book store they sell their books for 1/2 cover price + $0.25. They give you 1/2 cover value in trade towards books for your trade ins. So if a book originally cost $8 I could buy it there for $4.25. Or I could trade in an $8 book and get half the value in credit and pay $2.25 additional. So for new books that retail for $8 I'd be looking at 1 book + $2.25 to get a used book, which is about the same as the PaperbackSwap site. But if you look at slightly older books that retailed for $5-7 then you come out cheaper. I could trade a $5 used book in and pay $1.50 to get a used $5 book. Buying at used book stores generally works out better if buying a book with a lower original retail price.
Try the local Thrift store
The local thrift store will probably have some books. Prices vary a lot but you might find some $0.50 or $1.00 books.
Last but not least, don't forget to keep your eye open for books at Yard sales. You can often find some cheap books for sale at yard, garage or estate sales.
There are pros and cons to shopping any of these methods. You should be able to find cheap books at all of these. The selection of books and convenience may or may not meet your needs. While in general I don't think Paperbackswap is the cheapest method of book shopping, I do see it has a lot of selection and convenience. I just urge people to keep their eyes open to the shipping cost involved and consider the other options out there.
April 24, 2008
"Playing" the market on Updown.com
The website UpDown.com is an online site that simulates trading in the stock market. They give you $1 million in pretend money to trade with. Then if you do better than the S&P 500 in your trades or post stock analysis articles you have a chance to make real money. Its a fun site with a novel idea.
Personally I started an account just for fun. Its helping to convince me that I should not be trading in individual stocks. After about a month's trading my stock picks have lost -1.8% and the S&P500 is up +3.49%. So I'm underperforming the standard by 5%. Not good.
My personal history of trading in individual stocks is not very good. I haven't done a lot of real trading but what I've done hasn't done very well. Also about 10 years ago I setup pretend stock trades in a few stocks just to watch them and see how well they would do. They didn't do very well either. The stocks I picked were Altria, Dupont, Exxon and Chrysler/Daimler. Exxon has done very well in the past 10 years and has basically tripled in that time. But my other picks didn't fare well at all and have more or less remained flat.
I'd recommend trying out UPdown if you are interested in stock trading. Its a fun site to get some practice with stocks and test yourself plus there's zero risk involved and you even have a chance to make real money playing on the site.
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