Should I Upgrade to a More Fuel Efficient Vehicle?

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With gas prices near $4 per gallon, it’s a rare motorist who isn't asking themselves 'should I upgrade to a more fuel efficient vehicle?' But before you can actually make the move, you'll need to look at the cost of your prospective new car, the trade-in value (or amount you still need to pay off) on your current car and the prospective gas savings from old car to new.

Autobytel's new calculator helps answer the "Should I Upgrade to a More Fuel Efficient Vehicle" question. The calculator takes your net out-of-pocket costs to upgrade to the new vehicle, divided by the total gas savings per year, to show you how many months it takes to break even.

Using the Calculator

Like any financial calculator, you plug in numbers based on a set of assumptions. These include the cost of gasoline per gallon, the number of miles you drive per day, and the miles per gallon your old vehicle gets vs. your new car's mpg.

The calculator also includes cost assumptions for your current and prospective new vehicle. These include the monthly payment on your current vehicle, the number of payments remaining, and your anticipated sale price. For the new vehicle, the calculator looks at your estimated monthly payments, the number of months in the loan, your down payment, the taxes and registration fees you'll pay for it. It will also account for state and Federal hybrid tax credits, if applicable.

Plug in the numbers and you may be surprised at what comes out.

Let's assume gasoline is $4.00 per gallon and you drive 33 miles per day, or 12,045 miles per year. If like many SUVs your current vehicle gets only 14 mpg and your new vehicle gets 36 mpg, it can still take 65 months for the gas savings to pay for itself, assuming your old vehicle is worth $7000 and the new one costs about $19,000.

If your current car is worth less and the new car costs more, it will take even longer for a new gas efficient vehicle to pay off. If your current car is worth $5000 and your new one costs $24,000, it will take 114 months (9½ years) for the $2103 in yearly gas savings to pay for itself.

But this analysis doesn't account for everything. First, you can't assume your old clunker will run for 9 years; having a new car is its own reward. Second, the more you drive, the shorter the payoff will be. Finally, the payoff period drops as gas prices rise, which may be some consolation if gas prices soar to $5 a gallon.

Gasoline Assumptions

Gasoline cost per gallon ($)

Miles you drive each day

MPG (old vehicle)

MPG (new vehicle)

Cost Assumptions - Old Vehicle

Current monthly payment amount (old vehicle) ($)

Number of payments remaining

Anticipated sales price ($)

Cost Assumptions - New Vehicle

New car loan term (months)

New car sale price ($)

New car down payment ($)

New car interest rate (%)

One-time taxes/registration/fees ($)

State/Federal income tax credit (if applicable) ($)
Click here for DOE Fuel Efficient Vehicle Tax Info

All Calculators

Certain specifications, prices and equipment data have been provided under license from Chrome Data Solutions ("Chrome Data"). © 2012 Chrome Data Solutions, LP. All Rights Reserved. This information is supplied for personal use only and may not be used for any commercial purpose whatsoever without the express written consent of Chrome Data. Chrome Data makes no guarantee or warranty, either expressed or implied, including without limitation any warranty of merchantability or fitness for particular purpose, with respect to the data presented here. All specifications, prices and equipment are subject to change without notice.