My Jeep gets an average of 12mpg and I can go about 160 miles per tank of gas. It’s pretty bad, Im usually spending $45+ each fill up. Ive been thinking about buying a newer car that gets 24+mpg so I could save on gas money. It sounds like the smart thing to do, spend less on gas, save more money. Right? Guess what, I was wrong.

Right now I drive about 200 miles per week. Which is 10,400 miles per year and I can drive around 160 miles between refueling. Lets look at the numbers and see how much I spend yearly on gas

10,400 / 160 = 65 fill ups each year

Current gas price in AZ is 3.68 per gallon

3.68 * 13gallons = $47.84 for a tank of gas

65 tanks per year * 47.84 = $3,109 annual fuel cost

Now lets assume that that I bought a new car that doubled my mpg to 24

10,400 / 320(miles per tank) = 32.5 fill ups per year

3.68 * 13gallons = $47.84 for a tank of gas

32.5 tanks per year * 47.84 = $1,554.80 annual fuel cost

Obviously $1,500 is allot better then $3,000 but thats only half the story. A newer car is going to cost $5,000 – $10,000. Lets assume I bought one for $6,000.

I would have to drive that car for 4 years before I realized any savings on fuel.

$6,000 (cost of car) / $1,500 (savings on gas) = 4 years before a positive return

And honestly by that time the car would be pushing 150,000+ miles. Not to mention repairs and upkeep.

While the idea of a new car and saving on gas is an appealing option, when you look at the numbers it is plain to see that it does not make financial sense.