Originally Posted By: hatt
Show you math on this. The numbers don't work unless you buy a beater and hope it's trouble free. Using your example of 22500 miles/yr and assuming 10 mpg their total fuel bill is less $4500. A 30 mpg car is going to cost $1500 in fuel. Then insurance get you up to $2500+. A second car adds up. You need years for this to start paying off, and by then you need a new car so the cycle starts over. This is no different than all the people trading off their SUVs for huge losses back when gas was high to get something better on gas. The numbers didn't work there either. The $7K you lost buys a lot of gas.
OK, lets use my family's main farm truck.
$51,000 Chevy HD 4WD 6.0 with a double cab LT with tax/tag
You get about 12mpg on average, normally a bit less. Not including towing trips.
Drives about 25,000 a year. So fuel at $3 per gallon @12mpg is $6,250 per year
Insurance is t least $1200 with high miles or low miles at or less than $800per year.
Lets say that with a small car, the vehicle only does 7,500 per year and the small car gets 18,500 per year. So at 7,500 the fuel price per year is $1875. Ok, this is the killer
Maintenance... well, that is more of a challenge. Lets say about $1000 a year for the first 5 years and then 2K+ after that. We just replaced the engine
Now, we hold onto our trucks nearly forever (or sell to family). We have a 2010 era, a 2000 era, a early 90s era and a 80s vintage. So depreciation? Ehhhh.
However, if you are putting a lot of miles on the truck the value is normally about 20% of the vehicles original worth (10 years old with 200K miles), but keeping it "low miles" is only 30% of the original value (75K miles in 10 years). So a "low mileage" truck will only net a $5K bump in depreciation.
Lets use a Focus because it is easy to pull 10yo value data (my family ended up with an Encore).
Focus
About 17K OTD. After 10 years of depreciation, it is worth about 15% of the MSRP at 175,000 miles (more if fuel prices spike).
Fuel economy is about 33mpg skewing towards the highway mileage. So fuel at 18,500 mile per year and $3 per gallon is $1681
Insurance is $700 per year.
So, the differences:
Fuel
Truck only $6,250
With Car: $3556
Gain: $2694 per year
Fuel is the key. You have to keep that as high of a benefit as possible as it offers the key. So...
17K - 15% recoup over 10 years is $1445
Recoup from a low mileage truck is $500 per year compared to the high mileage one which washes out the insurance difference.
Maintenance will skew in favor toward the car/truck combo or be a wash as the car will be less expensive to repair, especially if you go Diesel with the truck. Heck, My 2009 6.0 e450 cost me 13K+ a year in maintenance. Only one of my passenger vehicle fleet has cost more than $1000 in maintenance per year (averaged out), most are about $400-700 per year. We had to replace the transmission a few years in.
Tax will vary per local so you will need to run that cost for yourself.
The key will always be the gas cost over the long run. At $2 around here, the benefit is minimal if not a cost. However, at $4 is a a money saver but you have to run it out for the long term. This is not the same thing as folks trading in SUVs vs small cars (short term) as that is a replacement vehicle so the depreciation is added to that single transaction. Since dep. is not really apples to apples with this, it is kinda mute with that comparison.
The other thing is this. We are looking at 10 year intervals. If you do a lot of miles on a truck for commuting, then you are putting garbage miles/use on a tool (shortening its life). We keep trucks for 30 years. So, if you are doing 25K miles a year, re-buying in at 200K miles (every 8 years) vs keeping the truck with less miles for 15-20 years, then you will spend $50,000 + $12.5K (for those two years to make it to 10 years)... so you are buying that second vehicle anyway. The longer you can keep the truck going, the better as it is a tool... so don't use a high-end chainsaw to ground down a stump.
