Savings from switching from a Jeep Wrangler to a Toyota Prius
I had a Jeep Wrangler that I loved. It was awesome. I felt super safe driving it in Western New York winters and it was fun to take the top off in the summer. However, everything that it was good at, I couldn’t really use. It was great at off-roading, but I’m not going off-roading in my daily driver. It was great for camping, but we never took it because it was too small to fit people and gear in it. It was great in snow, which we have a lot of here…but then again, I can work from home if need be so I’m not too worried about that. I also didn’t buy into the whole “upgrade and lift” scene, since I didn’t want to spend the money and typically had no use for upgrades, since it was just my daily driver. I realized that the only thing that was keeping me in the Jeep was the way that it made me feel to drive. It just felt fun. How much was that fun costing me? I’m finally sitting down to figure that out.
So, what did I need a vehicle for? Commuting and getting groceries (99.5% of the time) with occasional camping (0.5% of the time). How was the Jeep at that? Horrible. 14-19 MPG is just pitiful. The ride was sloppy and rough. The sound inside was loud. The cargo space was small. I would joke to my friends that I never had to drive anybody anywhere because I could never fit more than 2 people in the Wrangler. I always had my back seat removed (due to the lack of cargo space otherwise).
I ended up trading it in for a Prius and braced for all of my friends wondering “Why the hell did he go from a Wrangler to a Prius?”
I’ll tell you why. It’s great for what I use it for. I can drive more than 1 other person around. It’s comfortable inside. It’s quiet inside. Weather can’t enter the car (although I have to admit it was a little fun driving in the rain with a crappy soft top). And, it gets 44-50 MPG. I was able to trade in the Jeep for it straight up, so my savings immediately started. How much savings is that?
Right now gas prices around me are $2.23. The Jeep’s $/mile is:
$2.23 / 19 (average mpg, generous here) = $0.12 per mile
While the Prius is:
$2.23 / 44 (average mpg) = $0.05 per mile
Or less than half of the Wrangler.
Since I’ve been using Moves to track my driving (and all other movements), I downloaded my 2015 summary information. Since I didn’t commute by bike for most of the year, my monthly driving totals averaged out to 677 miles or 8131 miles per year. Switching to the Prius has saved me:
(8131 miles * $0.12) – (8131 miles * $0.05) = $569.17 / year or $47.43 / mo
To see how much those monthly savings would add up if invested in the stock market over 10 years, you can multiply that monthly savings by 173. This is a good “back of the napkin” magical number that assumes a 7% return of investment, which is par for the course over 10 years. This means that if I invested the savings (which I do), the Prius would save me $8205.39. That’s great and all, but let’s put it into the perspective of early retirement. How much monthly cash does $8205.39 get me, if I withdraw 4% of that per year? To find that number out, either divide 4% of $8205.39 by 12…or just divide $8205.39 (yearly salary) by 300 (12 / 0.04).
So, the act of switching from a Wrangler to a Prius now, gave me $27.35/mo income later. This assumes that mechanical repair costs are roughly going to be the same. It also assumes that I continue to drive economic cars for 10 years.
What’s even more, I essentially paid myself $8205 and found a car that was better at the things that I most commonly use the vehicle for. What an incredible bonus. A better car for me AND it costs less!?
Do you think you might not have the right car for yourself? I urge you to take a second look at the options, because the rewards are grand (as in, thousands of dollars) if you can downsize and still keep it appropriate to your life.