Is it better to pay $500.00/month for gas for a car already paid for vs a used car that uses less gas?

Question

Used car would be $300.00/month, 4 years newer than other car and has 70,000 less miles. Insurance would be the same. Car already paid for has had numerous problems and I am worried about the long trip daily in the car

Answer 1

Look at the cost vs. benefit. Your new (used) car will cost you $300/month over your current car, but that's without factoring in gas savings. Say your new car gets 20% better gas mileage, that would drop your monthly gas cost from $500 to $400 ($100 savings). So your new car is costing you a net of $200/month over keeping your current car.

You say your current car has had numerous problems, but as long as the average repair bill is less than $200/month, financially you still come out ahead by keeping it (also keep in mind there are no guarantees your next car won't have problems as well).

Of course, this does not factor in the benefits of driving a "better" car (less time in the shop, nicer condition, possibly a better ride, etc). If driving a theoretically better car is worth $200/month to you, then go for it, It's your money. But from a strictly financial point of view it's almost always better to keep a car you've paid off and drive it as long as possible ("until the wheels fall off").

Answer 2

It is better to pay the $300 a month for a good car than to keep driving a car that is constantly having problems. In the long run, it will either even out, or be cheaper to drive the newer car. Plus, it gets better gas mileage than your current vehicle. $500 a month for gas is a lot, even considering the fact that gas is averaging $3.00 per gallon.

Answer 3

If your car is a piece of crap , I would look for a new one if you can afford it $300 a month you should be able to get a new focus or cobalt , some cars are leasing for $199 a month now to