HisHersMoney

Wow, I can’t believe I think that $3.78 for a gallon of gas is cheap. I guess it’s all relative. We were driving back across the State of Virginia yesterday and stopped about half way and filled up. I did notice that it’s still about $4.19 per gallon for premium here in Northern Virginia.

Everyone knows that are new car loses value the day you drive it off the lot. A used car kind of does the same thing as the retail price is higher than the trade in price. If you tried to use your used car as a trade in the day after you bought it you would not get the same value in most circumstances.

I bought my car in Oct 2005, it’s a 2004 Saab and I got a really good deal on it. New the car is right at about $30,000 and I bought mine a year old for about $18,000. Fast forward a few years and I now owe about $6500 on it. I financed it for about three and a half years and then refinanced it about a year later at a lower interest rate. My car should be paid of completely in about a year if I were to continue making the regular payment on it.

Right now my car trade in value is around $8000 so for once I actually have some equity in the thing. Out of curiosity I check what the value was for the same exact car was that was just a year older than mine was with what I projected my milage would be in another year. The trade in then becomes $6500 which is what I could expect my car to be worth in a year from now.

So, today I have about $1500 in equity in my car and next year I will have about $6500 in equity in my car. For the next year every penny I put into my car I could expect to get back from it. We did but the extended warranty directly from GM on the car so any repairs it needs will be covered in full right at the dealership. So, my only real cost for the next 12 months is gas and insurance. Insurance is about $500/year and I use about $75/month in gas, or $900 a year.

So many people are considering buying cars that use less gas these days due to high gas prices. My car has a turbo in it so it requires the premium fuel and gets about 20 miles to the gallon which isn’t a whole lot better than some of the SUVs these days. If I bought a new gas sipping car to replace this one I would have to pay on it for the next few years before I starting breaking even and then probably another year before I starting actually getting value back from my car.

We do not plan on getting rid of the Saab any time soon. It’s covered under the bumper to bumper extended warranty for another two and a half years. By keeping the car that entire time we will have saved ourselves over $8000 in payments and our only extra expenses on it will be regular maintenance.

So question to the readers: When are you no longer upside down on your car?

Well as of last Friday I no longer commute to work via car. Previously I have about a 15 minute commute to my office where my employer paid my $60/month parking fee. It really didn’t eat up THAT much gas but still resulting in a $75/month petrol bill. With the recent increase in gas prices I will be glad to leave the car at home.

As I have eluded to in previous postings, we recently moved to a new apartment. I wish I could say that the new apartment will be saving us money on rent and utilities but in reality it won’t. We didn’t make the move based on financial considerations but really just on general sanity (more on that later). Luckily the new place is exactly one mile from my office so as long as it’s not pouring down rain or over 100 degrees there’s really no reason for me not to walk.

I turned my parking garage opener in to my boss in exchange for a nice new shiny Smarttrip card. For those of you not in the Washington DC area, Smarttrip cards are like a little credit card which has preloaded funds on it to ride the public transportation. My company gives their emplyees two options for transportation, paid parking or paid public transportation. Even though I will be walking I took the public transportation option since I do ride it occasionally and I might as well ride free.

So Friday was my first day walking, it was an absolutely beautiful day weather wise and the walk was quite enjoyable. I recently had loaded my iPod with the audio version of Steven Covey’s 7 Habits book (from the local library) so I have plenty of listening material since it’s something like 14 discs long!

I even decided to cancel my local gym membership wince I will now be enjoying two miles of walking a day which has got to beat 2 hours of aerobics a week at something like $65/month. This brings my savings to about $115/month as I will still need to put some gas in my car for some errands and such.

Before you go thinking of where I could put those $115/month I will tell you where it’s going – a housekeeper. I am done spending my evenings and weekends trying to keep up with the cleaning. I would gladly walk to work in trade for house cleaning!

I came across an excellent article by Paul Michael at Wisebread this morning. It asks the question “What will you do when gas hits $4 a gallon?” and responds with “I’ll pay it just like everyone else.”

And you know what? He’s exactly right. For probably 90% of this country, we’ll just suck it up, drink a latte or two less a week, and live our lives as we had been. Let’s face it, most people are not willing to fundamentally change their lives unless gas say doubles or triples from even where it’s at right now. People these days can’t live without gas, electricity, and the internet. They are staples of our everyday life.

Paul also linked a YouTube video that I found fascinating and left me wondering how long if ever that we’ll see something good come from this man’s invention?