The Key to Paying Off Your Student Loans in Five Years or LessNovember 6, 2017
Australia Trip 2017: Day 41January 11, 2018
Like many young professionals, I recently found myself in the market for a new Toyota Camry. While deciding which model to choose I was hit with quite the moral dilemma, do I take into account my carbon footprint and buy a hybrid or do I try to put some money away for my fraternity reunion in Panama City next spring and purchase the less expensive gas version. To make matters worst I had recently seen Al Gore’s new movie An Inconvenient Sequel: Truth to Power and was made painfully aware of our societies ever deteriorating environmental situation. However, ice-cold beachfront Corona’s in Panama City was enough to force even the strongest willed environmentalist to swallow their pride and go with the gas version. To make a long story short, I decided to do a cash benefit analysis to decide which model I would purchase. While doing this analysis, I had to take into account several variables:
- The first phase of my cost benefit analysis involved the difference in price between the two models. There was a substantial difference in price between the regular Toyota Camry and the Toyota Camry Hybrid. To provide you with the specifics a 2018 Toyota Camry starts at $24,000, while the 2018 Camry Hybrid comes off the lot at $27,800. Given this substantial difference in price I was initially tempted to go with the regular Toyota Camry. However, there were still several other variables I had to take into account, those being the price of gas, mileage and number of miles I planned on driving the car for.
- The second phase of my cost benefit analysis involved how many miles I planned on driving the car for. Putting myself in the shoes of the average suburban American who often commutes 50 miles to work round trip, I decided that putting 30,000 miles a year on my car was more than reasonable, and that having the car for five years was also reasonable. So in total, I planned on putting 150,000 miles on my Camry before getting a new one.
- The third and final phase of my analysis took into account the mileage per gallon for each respective vehicle, price per gallon of gas, number of miles driven, and the initial price of the respective cars. Too make a long story short, and spare you the agony of my less than impressive attempt at being a mathematician, a Hybrid Camry becomes more cost efficient than the regular Camry at $1.57 per gallon. Given the fact that the average price of gas in New York State in $2.62 per gallon, I would highly recommend purchasing the Hybrid Camry over the regular Camry.
The key to making any wise financial decision is doing your research; the same is true with investing. If you were to invest all the money that you saved a week in gas in the Dollar Investment Club, you will be in the market for a sports car by the time your ready to buy a new car!