Sunday, January 15, 2012

Savings with an F150?

Have you seen the new F150 commercial, the one that talks about cutting back on family vacations and cell phone minutes to save money because gas prices are so high and "you still have to work," and then suggests you save by cutting back on gas by buying a new F150? How about we do some math on that.

Let's consider you have, say, a 2006 F150, and you go buy a new 2011 F150 with the 3.7L V6 (which gets 23 MPG highway). Per the epa ratings, let's look at the new vs the not so new,  here. Per that chart, you'd save anywhere from $500-1,000 per year in fuel costs (assuming "regular" gas, not E85, which gets significantly worse fuel mileage). Or, in other words, somewhere between $42 and $84 per month. But that's not the whole story.

Consider what you'll get for trade in on your 2006 F150 toward the new one. KBB shows trade-in value of an 06 F150 Super Cab XLT with 6.5' bed a bit under 10k (w/ 76k miles on it, good condition, and "usual" options and drivetrain). KBB shows a "fair purchase price" of the 2011 F150 Super Cab V6 with 6.5' bed as $28677. Subtract 10k and you're facing a trade difference of over $18.5k (and that assumes you have no outstanding balance owed on your current truck). Without interest, at 84-month financing (or 7 years), that's a bit over $220/month, or between $180 and $140 per month more than you're saving in fuel. Looks like you'll be cutting back even more on family vacations and cell phone minutes if you follow Ford's recommended savings plan!

In fact, if you can get a 10k trade on your current truck against the new F150, your current truck would have to get an average of around 0 MPG in order to break even with the new truck payment. You'd actually have to be getting negative MPG to save anything! Now, if you can get something near your current truck payment, then, yes, you'd perhaps save some money. Then again, this doesn't take into account any increased insurance premiums or reduced maintenance (if your current truck is old enough that maintenance costs are significantly increased vs a new truck). So, can we now sue Ford for false advertising? I really don't see how a new F150 can really save you any money.

Now, if you can "work" with it, a 2011 Ford Ranger with a four-cylinder and manual transmission would save you another $500/year in fuel costs (I'll leave it to the reader to do the math to find the break-even and savings points with the Ranger; if interested, the KBB "fair purchase price" on the Super Cab Ranger XLT with 4cyl is $20,480, note that all prices are based on my home zip code of 36507).

Truth in advertising? I think not.

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