Taking A While To Make Up On Gas

Teresa's parents want to buy a car with better gas mileage. Dave explains why it will take YEARS to make up the cost difference.

QUESTION: Teresa's parents have a 2004 SUV. It's paid off, and they are wondering if they should sell it and buy another car for the gas mileage. There are quite a few reasons why Dave thinks they shouldn't.

ANSWER: Under no circumstances should they do that. They're going to sell a $10,000 car to buy a $15,500 car that gets better mileage. It would take years and years to make up the difference in gas there. If they want to save money on gas, sell the SUV and buy a $10,000 car that gets better mileage. Buy a nice used car; that way you don’t spend money to save money. You just swapped dollars there. Even then, you've got to be careful to not get suckered in and pay too much.