Lower Insurance + Less Gas + a Car Payment (may)= Savings Over a Paid-Off Car

We recently sold our full size van and purchased an older Honda Odyssey mini-van. I love it! I just figured out our gas mileage today and I am averaging 25mpg, with most of that being city driving. Granted it is a 1997, but it is one of the best mpg mini-vans out there... and it is cheap on insurance!

So, here's the deal. We were lucky to be able to sell our full size van and pay cash for our Honda. With gas prices rising, not too many people can do that. Many people want to ditch their full size vehicles but are having a much harder time selling them. But, some families have found that it is cheaper to trade-in their full size vehicle, even if it is paid off, and get a more economical vehicle along with a car loan and they are actually saving money. According to an article from rgj.com,"Janyce Settera of Reno had a Jeep Commander she loved, but a Volvo Cross Country station wagon just made more sense." They were not able to sell their jeep but was able to get a good trade price for it at a dealer. Although now they are making a car payment "when they penciled out the figures, the money they were saving in gas and insurance equaled or surpassed the car payments."

Do the figures! How much are you paying for gas in a month? Now, figure out what a loan payment would be on a vehicle that gave you better mpg. Next, figure out how much gas you would spend on that new vehicle along with thelower insurance costs. You may find you are spending more on gas and insurance to keep that full size vehicle.