Cars

How Shopping Around Can Cost You

October 10, 2005 By Jeffrey Strain 1 Comment

Bargain hunters beware! Running across town to save a few cents is probably costing you more money that you’re saving. This is a classic trap that bargain hunters run into: wasting money when they think they are saving money.

The problem is that the bargain hunter only factors in the price of the item (product x is $10.00 at store A, $12.00 at store B) without taking into consideration the cost of traveling to the store. The automatic assumption is that you save $2 by shopping at store A instead of store B, but what if store A is 7 miles further away from you home than store B?

According to AAA the cost of gasoline alone is now approximately 10 cents per mile for a 2005 Dodge Caravan and has a total operating cost of 16.2 cents per mile (this includes maintenance and tires).

That means a trip to store A would cost you $2.27 in gas and maintenance for the extra 14 mile round trip meaning that the bargain hunter actually lost money getting the “bargain.”

A good way to get your bargain without the cost of extra driving is to find the closest store that will match competing offers. In addition to getting the best price on goods, it will also save you a lot of time running around to all the different stores.

Hybrid Car Saving Myth

October 10, 2005 By Jeffrey Strain Leave a Comment

An interesting article at money.com that exposes the saving money myth behind hybrid cars. The assumption is that since hybrid cars get better gas mileage, they save you money. While they do get better gas mileage, the reality is that overall they don’t save you money:

A hybrid Honda Accord costs about $3,800 more than the comparable non-hybrid version, including purchase, maintenance and insurance costs. Over five years, assuming 15,000 miles of driving per year, you’ll make up that cost in gasoline money if the price of gas goes up immediately to $9.20 a gallon and averages that for the whole period.

This is not to say that hybrid cars are bad. In fact, I think they make a social statement of support for more environmentally friendly vehicles. It’s important, however, to be able to distinguish between the two and to realize that better gas mileage doesn’t automatically equate into saving money.

Driving & Money

October 10, 2005 By Nate Leave a Comment

I am back from my short trip to the US and I had a few observations on my travels. With gas prices as high as they are, I guess I would expect people to slow down a bit to save on gas. Slowing down saves a lot of gas – that was the original reason that the speed limit was reduced to 55 mph – it was the result of the energy crisis in the late 1970s to help conserve fuel. You use about 20% more gas driving at 70 mph instead of 55 mph.

Even though most of us know this, it doesn’t appear that many people are using this information. Whether is is that it’s hard to equate driving slower with saving money while on the highway when you want to get to your destination as quickly as possible or something else, people were definitely not driving slow on my way to the airport. i was driving between 65 mph and 70 mph (which goes to show that I to need to work on this area a bit more) and I was still passed by 4 cars for every one I passed (it was early morning and their weren’t a lot of cars on the road – I don’t know how much this skewed my observations – I passed 23 card and was passed by 93).

It goes to show that we like to complain about high gas prices, but when it come to making some changes in our habits to lessen the effect of the high prices, there still are a lot of us out there that aren’t willing to do so.