Car Purchase Price Vs Fuel Consumption

fuel consumption

How much money do you really save by having a low fuel consumption car?

Let’s compare two cars, one car uses 10 litres of fuel for every 100km it travels and the other car uses 5 litres of fuel for every 100km.

Let’s say the cars travel 10,000km every year which is pretty average for most people.

The price of petrol in Australia at the moment is about $1.20 per litre.

The first car will use $1200 worth of fuel and the second car will use $600 worth of fuel saving $600 a year.

In 10 years of driving if you have the fuel efficient car you will save $6000.

You might think “wow that’s awesome, having the fuel efficient car saves more than the other car!”

Not necessarily.

Some people will buy a very fuel efficient car but the value of the car is high. What this means is that as soon as you buy that car you have already spent thousands of dollars of “fuel savings” on the higher value of the car!

I will explain,

If you buy a car for $5,000 but it uses 10 litres per 100km, people might say “that car must use quite a bit of fuel hey? I drive a hybrid and I use 5 litres per 100km!”

But what if the person who bought the hybrid spent $25,000 or more to buy it? It would take 30 years of driving to save back the money they spent on buying the fuel efficient car!

Do you see what I mean?

How much money you spend on cars is determined way more by the purchase price of the vehicle than fuel consumption.

Now obviously the best of both worlds is to buy a low value car with good fuel consumption as well but I just wanted to make a point that a lot of people will go out and spend 20, 30, 50k+ on a car and then choose a model that has good fuel consumption not realising they have already blown away years of potential fuel savings in the depreciating purchase price.

Does this mean you should go out and buy the cheapest car you can find?

No, you need to at least get a decent car with things like a high safety rating, not to many kilometres on it, adequate for the uses you need it for and of course good fuel consumption.

Some second hand cars can cost you a lot of money to fix! For example an old hybrid can cost you thousands to change the battery if it dies, some dual clutch transmission cars can cost a lot to fix, luxury cars like Mercedes and BMW’s can be costly to maintain as well.

So do your homework before you buy a car but you can definitely get a good safe car for less way less than $10,000!

I hope I have made you realise this guys thanks for reading!

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