Saving Money on Fuel Isn't So Easy

[FStephenMasek]

This topic may be rather obvious, but it is more interesting with real world data.

Over the 139,140 miles I've got on my 2006 Explorer V8 RWD, the computer in it claims it has used 8,023.3 gallons. It is rated 15 city, 21 highway. The actual mileage works out to 17.34MPG. Using today's California prices of $4.80 for regular, that works out to $38,512 over six years.

I've been considering replacing it sometime next year with a BMW X1 with the turbo 4 and rear wheel drive. The new BMW weighs 1,000 pounds less, and is rated 24 city, 34 highway on premium. It would be faster and handle better than the Explorer, so would be safer. It would also be quieter. But, it would be a good bit smaller. It would probably get 29 MPG overall. Thus, if I drive the same amount over the next six years, and premium is at the current price of $5, I would spend $23,990 on fuel for it. That would be a savings of $14,552 over the Explorer, but here is the rub - that works out to just $201.69 per month. Would that be enough to justify the smaller size, and therefore less convenience? Not for me. However, if BMW decides to make the largest of the three diesel engines they offer in Europe optional in the USA, that might be enough to tip the scales in favor of the X1. Mercedes is offering a diesel in their GLK (and many other vehicles).

Of course, if fuel prices fall, as I expect they will, the savings to be had by getting a smaller vehicle would also fall. The bottom line is that saving money on fuel is not all that easy, as it takes a very large increase in mileage to make meaningful savings, and those have to be balanced against the utility of the larger vehicles.

 

[kam327]

My opinion is this is a good analysis to do but is useless without also factoring in the cost of the car, whether on a montly payment basis or a depreciation basis if you're paying cash. Certainly the BMW will cost you more per month, and probably even much more than the fuel savings. That's why many folks would be better off keeping their paid-off gas guzzling pickup than going out and buying the latest fuel sipper for $300 a month.

I did this analysis when deciding whether to trade in my wife's 3-year-old full size Taurus for a brand new Focus and give her my Explorer. I looked at how many more payments I had on the Taurus, how much the Focus would cost me, montly fuel cost for each, estimated value at the end of the 5-year analysis window, etc. I determined that I'd do a little better trading in for the Focus but only because I assumed the Taurus would need new tires and pads within the coming year whereas the new Focus would not. Otherwise it was better to keep the Taurus.

 

[willied]

The 4th gen V8 RWD Explorer was rated at 15 city, 21 highway, but it's since been adjusted to 13 city, 19 highway since the EPA changed their methods.

http://www.fueleconomy.gov/feg/Powe...2006&make=Ford&model=Explorer 2WD&srchtyp=ymm

I would have to say that you pretty much have to keep your car until it falls apart to really make it worth it. Also factor in the poor reliability of BMWs and it looks even less appealing.

An almost feasible vehicle with good utility and MPG would be the Ford C-Max Hybrid, although it isn't the best looking thing ever and it is still a good bit smaller than an Explorer. 47 mpg city and highway is really really nice, though. It also doesn't cost too much, starting out around $25K.

 

[bitkahuna]

good thread. have gone over the math a number of times regarding trading in my '06 rwd v8 explorer limited for something that gets better fuel economy. i get on average about 17.6mpg. i've never been able to make the math work and there's nothing wrong with my explorer. and now i finally put in the usa*spec ipod interface that works with all the standard stereo (incl steering wheel) controls, i'm a LOT happier.

the explorer is roomy, powerful, and quiet, and the seats to me are insanely comfortable on long drives (best i've ever had).

anyway, unless you're keen on switching to a MUCH smaller and more fuel-efficient vehicle, the math doesn't work. now it's true the residual value of what you buy is still there and no doubt will be greater than if you keep the explorer, but the challenge still remains, if you want explorer type utility, fuel economy doesn't get a whole lot better with anything else. if a honda cr-v had a 6 speed auto (instead of the weaksauce 5 speed) that would help. the toyota pious vehicles are just so slow and ugly (to me) and i could never stand center-mounted guages!

so the quest continues, but i'm still good with the exploder for now!

 

[2TimingTom]

Of course, if fuel prices fall, as I expect they will,......

You think so? Historical data doesn't really support that trend.

Here's my thing: do you NEED the size and power of the Explorer on a daily basis? Probably not. You can probably pound out the smooth pavement between home and work with anything. Keep the Explorer and get a commuter car- something that can probably double the Explorer's MPGs without even trying.

I bought a '95 Saturn SL2 to do just that awhile ago. Paid $1500 out the door for it. In the 11 months I had it, I saved over $800 by driving it to work instead of my Explorer. And that was with gas that doesn't cost nearly as much as what you are paying. And I'm thinking that I didn't drive as far as you drive- so the savings will be even more in your favor.

One thing I learned about the SL2- I set my sights a little low. This particular car didn't have power windows or locks, no cruise control and the AC didn't work. It looked decent, but it was what it was- cheap. Part of me wishes that I would have spent $4-$5k on something nicer. But after 11 months I sold it for $1800 and kept my wife's VUE when we bought her a new Escape so it worked out. The VUE isn't super nice, but it has all those things that the SL2 didn't have plus room to carry the family comfortably. And it gets 27 mpg with the way I drive it.

 

[kam327]

I bought a '95 Saturn SL2 to do just that awhile ago. Paid $1500 out the door for it. In the 11 months I had it, I saved over $800 by driving it to work instead of my Explorer. And that was with gas that doesn't cost nearly as much as what you are paying. And I'm thinking that I didn't drive as far as you drive- so the savings will be even more in your favor.

So in that first year you spent a net of $700 more than you would have by just continuing to drive the Explorer. Or in other words buying the cheap-o commuter car has nearly a 2-year payback period ($1,500/$800 = 1.9 years). And that doesn't include the cost of additional insurance.

This was my point in my earlier post - you have to include the cost of the new vehicle in any fuel savings analysis.

 

[2TimingTom]

But then there's the near unquantifiable value of having a spare car.

When my transfer case went out on my Explorer before I had the spare car, I paid something like $1500 to have it replaced. Most of that cost was associated with taking it to a shop and paying them to do it and get it back to me relatively quick. If I had the spare car, I would have performed that work myself (and probably gone with a manual transfer case instead of the automatic piece I have).

Or any other DIY project, especially on some of the older Explorers, that encounters a bump along the way (usually rust driven) and delays the project. Having that spare car to either run to the store for parts or to drive to work while you wait for parts to come in. I've bummed probably more than my share of rides to work over the years! My body lift took over a week- it's a relatively easy project but unexpectedly needing to replace 2 body mounts slowed the project. Or my shackle install that I was faced with a frozen bolt and needed to replace the bushing in the leaf spring- that took a couple extra days. And, probably the most important, being able to work at a relaxed pace while doing any of this work is worth it all to me.

And then there's the wear and tear factor. A set of tires for a commuter car are going to be in the neighborhood of $200-$300... for the set. I can buy ONE tire for my Explorer for $180. And then the fluids. A FWD commuter car will have oil, transmission and coolant. The Explorer has those PLUS transfer case, front diff and rear diff fluids. And if this discussion is centered around fuel economy, keeping those fluids in tip-top shape has to be part of that discussion.

Personally I love facing my first world problem each morning: which vehicle shall I choose to take me to work on this morning?

 

[damarble]

But then there's the near unquantifiable value of having a spare car.

When my transfer case went out on my Explorer before I had the spare car, I paid something like $1500 to have it replaced. Most of that cost was associated with taking it to a shop and paying them to do it and get it back to me relatively quick. If I had the spare car, I would have performed that work myself (and probably gone with a manual transfer case instead of the automatic piece I have).

Or any other DIY project, especially on some of the older Explorers, that encounters a bump along the way (usually rust driven) and delays the project. Having that spare car to either run to the store for parts or to drive to work while you wait for parts to come in. I've bummed probably more than my share of rides to work over the years! My body lift took over a week- it's a relatively easy project but unexpectedly needing to replace 2 body mounts slowed the project. Or my shackle install that I was faced with a frozen bolt and needed to replace the bushing in the leaf spring- that took a couple extra days. And, probably the most important, being able to work at a relaxed pace while doing any of this work is worth it all to me.

And then there's the wear and tear factor. A set of tires for a commuter car are going to be in the neighborhood of $200-$300... for the set. I can buy ONE tire for my Explorer for $180. And then the fluids. A FWD commuter car will have oil, transmission and coolant. The Explorer has those PLUS transfer case, front diff and rear diff fluids. And if this discussion is centered around fuel economy, keeping those fluids in tip-top shape has to be part of that discussion.

Personally I love facing my first world problem each morning: which vehicle shall I choose to take me to work on this morning?

That's about my take too. A backup vehicle can be a life saver. And when it's a 90s car, insurance is beans. Literally just a few bucks more than a single car for me. Depending where you live licensing and emissions fees can be excessive, but they're dirt cheap here.

 

[kam327]

Ha, well that's a whole nuther issue then. An intangible benefit if you will. Ignoring the fact that renting a subcompact for a couple days here and there when you need repairs done probably still puts you ahead in the long run.

 

[Jstcruz]

Ha, well that's a whole nuther issue then. An intangible benefit if you will. Ignoring the fact that renting a subcompact for a couple days here and there when you need repairs done probably still puts you ahead in the long run.

Oddly enough, I too have a 97 XLT (2wd) and a 95 SL2. I love having the gas sipper other than those cars use a lot of oil. Anyway, I got mine for basicly $2500. I drive to Orlando now and then kind of often - about a 4 hour drive back and forth. The car I'm sure has paid for itself by now im sure in fuel savings and having a 2nd car is great.

Anyway, The option to drive the car or truck is the difference between spending $25 or $65 on gas that very day. That alone is worth it in my opinion. I think the gas prices are bull and there is no real reason for it, but money is money. You have to do what you have to do.

 

[Ford Explorer9]

There are so many variables it can get kind of crazy. The largest of the variables however are repair cost, rate of depreciation, and gas mileage.

My 2007 Ford Ranger is paid off, in excellent condition with no repairs in sight, and gets halfway decent mileage at 17 combined with the 4 liter and 4 wheel drive.

The 2006 Ford Explorer I bought gets identical combined gas mileage, and better on freeway mileage. However I had to put over $2,000 into it to get it running right and it also depreciates much faster than my Ranger. So overall gas mileage didn't even matter, depreciation and repair cost were my largest issues.

I agree that it isn't as simple as just picking some random car that gets twice the gas mileage to save money, however it is easy to save money if you find a reliable vehicle with great mileage that doesn't depreciate quickly. The problem is those cars tend to be small and boring.

 

[Ford Explorer9]

This topic may be rather obvious, but it is more interesting with real world data.

Over the 139,140 miles I've got on my 2006 Explorer V8 RWD, the computer in it claims it has used 8,023.3 gallons. It is rated 15 city, 21 highway. The actual mileage works out to 17.34MPG. Using today's California prices of $4.80 for regular, that works out to $38,512 over six years.

I've been considering replacing it sometime next year with a BMW X1 with the turbo 4 and rear wheel drive. The new BMW weighs 1,000 pounds less, and is rated 24 city, 34 highway on premium. It would be faster and handle better than the Explorer, so would be safer. It would also be quieter. But, it would be a good bit smaller. It would probably get 29 MPG overall. Thus, if I drive the same amount over the next six years, and premium is at the current price of $5, I would spend $23,990 on fuel for it. That would be a savings of $14,552 over the Explorer, but here is the rub - that works out to just $201.69 per month. Would that be enough to justify the smaller size, and therefore less convenience? Not for me. However, if BMW decides to make the largest of the three diesel engines they offer in Europe optional in the USA, that might be enough to tip the scales in favor of the X1. Mercedes is offering a diesel in their GLK (and many other vehicles).

Of course, if fuel prices fall, as I expect they will, the savings to be had by getting a smaller vehicle would also fall. The bottom line is that saving money on fuel is not all that easy, as it takes a very large increase in mileage to make meaningful savings, and those have to be balanced against the utility of the larger vehicles.

My friend has a 2002 VW Jetta Wagon, the smaller version of the Passat and my 2006 Explorer is only slightly larger, and he manages 28 mpg combined easily without trying while I STRUGGLE to get 17 mpg combined doing the same drive, and I am easier on the gas! We both switch off driving for road trips and we can fit about the same amount of stuff into each vehicle, I hardly notice the cargo room difference. When it comes down to it I can fit more stuff of course but it definitely isn't a large difference, I would even bet the Passat might even have more room than my Explorer!

There is a hundred different ways to approach this question and I am only covering a few, it may not be super easy to save money and have similar utility, but it definitely isn't difficult either.

 

[willied]

You are limiting yourself to a very specific vehicle in your example, a sports car compared to a sports utility vehicle is not very fair in comparison for an everyday vehicle. If you wanted to stick to european brands you could try the Volvo V70 or the VW Passat Wagon, both have about the same utility of an Explorer with much better gas mileage and almost the same speed if not faster. Of course they can't go offroading though (I do know Volvo sells a wagon that can though).

My friend has a 2002 VW Jetta Wagon, the smaller version of the Passat and my 2006 Explorer is only slightly larger, and he manages 28 mpg combined easily without trying while I STRUGGLE to get 17 mpg combined doing the same drive, and I am easier on the gas! We both switch off driving for road trips and we can fit about the same amount of stuff into each vehicle, I hardly notice the cargo room difference. When it comes down to it I can fit more stuff of course but it definitely isn't a large difference, I would even bet the Passat might even have more room than my Explorer!

There is a hundred different ways to approach this question and I am only covering a few, it may not be super easy to save money and have similar utility, but it definitely isn't difficult either.

An X1 is a crossover.

 

[Ford Explorer9]

An X1 is a crossover.

Read it a little too quick and thought he meant a 1 series coupe haha, let me edit that real quick

 

[willied]

Read it a little too quick and thought he meant a 1 series coupe haha, let me edit that real quick

Haha. It is kind of weird to go from an Explorer to an X1, that's for sure.

 

[LONO100]

as stated in previous posts, you have to factor in the new car note you would have, the increase in the cost of upkeep and maintenance, the rise in your insurance, the premium octane you will need to now purchase, among many other little things that come with owning a euro.

a reasonable alternative would be to find an alternative way to get around keep the truck a recreational vehicle. i recently started taking the amtrak to work and it is saving me about 230 bucks a month in fuel costs. with gas and bridge toll, i used to spend 500 bucks a month on commuting costs. i now spend 272 bucks a month on a monthly amtrak pass, and i skateboard to and from the train stations to work and home. i get home just 15 minutes later than i would driving, and i dont have to deal with traffic. i just read a book to pass the time. if the train isnt an option, look at taking the bus, or a vanpool, or something like that.

 

[FStephenMasek]

Yes, the seats in the Explorer are quite good.

Someone suggested a cheap commuter car, but my Explorer is almost exclusively a work vehicle. However, it is not a commuter vehicle, as our work is scattered all over southern California, and it carries tools and test equipment we use. The most difficult item to carry is my Little Giant Ladder, and it fits crosswise behind the second row seats in my Explorer. I also collect and restore old radios, mainly from the 1930s, and the Explorer is good for carrying the console (floor standing) radios. Sometimes, our hatchback 2002 Mercedes-Benz C230K is all we need, and we'll use it for work on Monday and Tuesday this week.

 

[SBV45]

I bought my 2009 in August 12. It has 65,000 miles. I paid out $2,900 to replace front hub bearings, rr axle bearing, front diff drive shaft u-joint and front diff overhauled. All those components were complaining loudly. I got a good price on the vehicle to start with so now I have in it what I would have expected to pay for it.
Then I find I have the 5R55S transmission that has a TSB out on it.
The good news is that I get 17mpg around town and just under 21mpg on the highway.
That is slightly better than the 2005 Nissan Xterra I was driving until a radiator problem wiped out the trans.
The Exploder is far more comfortable and has more interior room than the Xterra.I do go off-road and launch/retrieve a boat in some barely usable boat ramps. So all in all owning a 4x4 vehicle is expensive but worth the money when you need it.

 

[FStephenMasek]

...you have to factor in the new car note you would have

What note? I don't buy what I can't afford with cash. Car loans are some the the stupidest things I did in past years. These days, I'm also buying rental houses with cash.

 

[mounted]

With interest rates as low as they are you're a fool to pay cash for cars or houses. Especially cars, since they are depreciating assets. Unless of course your credit sucks and you pay the "FU!" rates.