Does this idea make financial sense?

[Nermal]

Hello,

I've been wrestling with this question for weeks without any luck.

I currently commute to work in a 05 Honda Pilot SUV which gets 17 MPG. My average annual commuting miles is 20k. This vehicle has 60,000 miles and is paid for. Blue book value is $11,500 to $12,000.

My wife is a stay-at-home mom and drives a 05 Honda Odyssey with 25,000 miles. Her annual miles driven is 8000. There is a $14,000 balance on the Odyssey and it's value is about $16,500 to $17,000.

I was considering giving my wife the Pilot with 60k miles and trading the Odyssey in for a more fuel effecient car (Honda Civic 32/40mpg). There would be enough equity to cover the down payment.

My commute with a more fuel effecient vehicle could cut our annual fuel bill from $5000 to $2300, the Pilot would be driven much less and hopefully last longer. We would however gain a car payment for the new vehicle which replaces the Odyssey.

Does this sound like a smart idea or is it better to keep both vehicles as is?

Thank you for your advice!

[noppenbd]

Check out Edmunds.com True Cost to Own. You can put in a used vehicle and figure out the 5-year costs. Your plan should save you money. I estimated the cost/mile on the Pilot @ 20K a year at about 50 cents a mile. On the Odyssey @ 8K a year, 75 cents a mile. If you switch to Pilot @ 8K a year it goes up to about 75 cents a mile, but the Civic @ 20K will only cost you 37 cents a mile (I assumed you bought a 2005 Civic used, rather than a new one).

[maat55]

Personally, I would sell Oddyssey and pay cash for a more used economy car. Keep saving the former payment and move up in car, in a year or so.