Frugal Tip: Don’t Base Long Term Decisions On Short Term Trends
The price of gas, as of the moment of me writing this, is pretty low compared to 6 months (or even 3 months) ago. In my area of the US, gasoline is about $1.80 per gallon, whereas 6 to 8 months ago, it was over $4 per gallon.
I’m also semi-shopping for a new-to-us car. I say semi-shopping because as long as my current car has no major problems, I am content to keep it. But one more major problem and I am officially done putting money into it. So, semi-shopping.
Which means, if the price of gasoline was my only concern as far as the mpg of a new car, I don’t have to worry so much about getting a car that has good gas mileage, right? The cost of gas keeps going down and things are a lot better than they used to be…
Stop right there. It is never a good idea to make a long term decision (like buying a car you expect to keep for 10-15 or more years) on a short term trend. Yes, the price of gas is low right now, comparatively. But that doesn’t mean it will stay that way. Several years ago, the price of diesel gasoline, per gallon, dropped well below the price of unleaded gasoline. When that happened, I had several acquaintances buy cars that ran on diesel gasoline because it was cheaper to fuel them. But that trend didn’t last. Diesel crept above the price of unleaded, and has stayed there, generally, ever since.
There may be other reasons a person buys a car that runs on diesel – but the relative price of the fuel shouldn’t be the deciding factor. That’s a long term decision born out of a short term trend.
So when making a long term decision, consider all the possibilities. Don’t make a snap judgement based on just the current picture.
This frugal tip provided by paidtwice, who is eyeing a Kia Rondo at the moment.
January 10th, 2009 at 2:10 am
Right on! Your post is even more relevant when one considers the long-term trends in the availability of crude oil and petroleum-based fuel. It is almost certain that the world is past the peak in global oil production and that oil and oil-based products will only get scarcer from here on. Right now the collapse of the global economy is the primary thing keeping gas prices cheap, but the cheapness of gasoline certainly won’t last.
January 20th, 2009 at 9:23 pm
Every purchase should be considered by its long-term consequences. Even something as simple as spark plugs will cost more when you need more of them (4 cylinders vs. 6 or 8).
Something else to consider when buying a vehicle is its potential resale value. It doesn’t make much sense to get a low price on something that is low quality and/or won’t be worth anything to sell later. Of course cars almost always go down in value year after year, but there are some that hold that value much better than others.
Also, always check with your agent on the cost to insure a vehicle before you buy it.