It was a pleasure meeting JD this weekend and so I was concerned when I heard that he and his wife were in a car accident after we had parted ways. It appears that all is okay for JD, both physically and financially, which is great news; but all was not okay for the other driver.

If you’ve met JD, or read his blog, you know he’s a really nice guy. He’s very cognizant of others and the impact of his decision on others, so it’s not surprising to read his post about how he feels bad that this event may have tragic consequences for the other driver. Unfortunately, we all take risks in our lives and have the unfortunate burden of bearing the consequences should they occur. If the other driver didn’t have a driver’s license, he shouldn’t have been driving because he hadn’t demonstrated the minimum requirements (he could’ve used a bicycle, rode mass transit, etc.). If the other driver was in the United States illegally, unfortunately he took the risk to enter illegally rather than legally and now would have to face the consequences of his decisions. JD can’t let the decisions others make affect what he should do for himself and his family.

Let’s say that he did what his heart wanted, which was bear the financial brunt of the accident where he was entirely not at fault. What happens if he or his wife develops neck or back problems down the road? Since insurance was never notified, he alone bears the medical cost. If it were his car and it developed significant problems as a result of the accident, he alone bears the cost. He can’t “go back in time” and report the accident. While selfish, the future is a very long time and he has to think about the “total potential cost” of the accident and not just the cost of repairs. I think he did the right, and only, thing.

On the topic of accidents, taking risks and facing consequences, I have a similar unfortunately story (luckily we were witnesses and not participants).

One night my wife and I were driving home when we saw an accident at an intersection with a flashing red and flashing yellow light. This was one of those traffic lights that went from Red/Yellow/Green in the day, to flashing yellow and flashing red at night. The rules are that those who see flashing red treat it as a stop sign and those who see flashing yellow don’t need to stop but should proceed with caution. In this particular accident, the car with the flashing red didn’t stop and hit the car with the flashing yellow. This was a relatively slow accident but the damage to the flashing yellow car (not at fault) was pretty bad, it was undrivable; and the damage to the flashing red car (at fault) was relatively minor.

To make the drama worse, the driver of the at-fault car jumped out of the car and ran into the night! A few minutes later someone else returned (allegedly the same guy), but we were pretty sure he was different because there were two witnesses vehicles and we both thought the same thing. We thought the driver didn’t have a license or didn’t have insurance so he bolted, leaving his pregnant companion (wife? girlfriend?), to get a friend to take his place. Anyway, the true sadness in this story was the fact that the police discovered the driver of the not-at-fault car, who was driving with someone who appeared to be his son, was found to be above the alcohol limit and he was arrested. The other car drove away with a citation.

The man did not appear intoxicated, not that appearances are a good indicator, but ultimately did nothing wrong in that particular accident. However, he decided to risk driving home while he was legally intoxicated and now he had to face the consequences. Would the cops not have arrested him because he was with his son and he did nothing wrong in the accident? No. They couldn’t and now the guy was in handcuffs, sitting on the curb, with his son sitting next to him. It was a sad sight to see but we must all bear the consequences of our actions.

A few years ago, with my last car, I did a little calculation to help determine the “cost per mile.” I was doing quite a bit of driving back and forth from Baltimore to Pittsburgh, then Baltimore to New Jersey, to visit my girlfriend (now by wife, so I suppose it was worth it :)) and so this number was important for me to know. I also found that it helped make other decisions in my life easier because it gave me a very tangible cost associated with driving somewhere, such as to the gas station across town instead of the gas station on my route home.

The Calculation

The cost per mile can be broken up into three major categories and one catch-all:

• Gas: Clearly the dominant value in the calculation, gasoline is something that has to be based on actual costs rather than estimated costs. You can’t take the cost of gasoline, the EPA value for your car’s mileage, and figure out based on that. Ignoring the inaccuracy of EPA values, though they’ve made a push to make them more accurate, your car is probably not the standard car. You have crap in your trunk, your tires are probably not inflated perfectly every single drive, and your maintenance isn’t going to be perfect (get that 30,000 mile checkup exactly at 30,000 miles?). So, keep a log for five fill-ups, reset your B trip odometer, and calculate your gas cost per mile that way.
• Insurance: This value is easy, simply take your premium and divide by the number of miles you drive in a given year. The “rule of thumb” is around 15,000 miles a year, but if you have an especially long commute then you can increase that. You can always just throw in a guesstimate because what you use as your miles driven per year isn’t going to drastically affect this number. For example, if you pay $2,000 a year and you drive 15,000 miles, that’s 13.3 cents a mile. At 20,000 miles a year, it’s 10 cents a mile. Sure the difference is 33% but you’ll ultimately use this value for trips in the tens or hundreds of miles… meaning a difference of only 30 cents - $3.
• Tires: Depending on how expensive your tires are, you might want to go through with this calculation or just consider it part of the noise. I know tires say they can last 30,000 miles, but I believe most of my tires run only maybe 20,000 miles. Either way, this math should be pretty simple. Divide the cost of the tires by the mileage and add it to the running total you’ve been using.
• Everything Else: I always throw in an extra 3-5 cents to cover everything else, from windshield wiper blades to routine maintenance to oil changes. I figure that a $20 oil change put across 3,000 miles (I actually changed my own oil with synthetic but do it once every 10,000 miles) is small enough to be considered noise in the equation so I use the 3-5 cents catch-all value.

So, what’s the final number? The IRS business mileage deduction is 50.5 cents a mile, how close was your value to this one? When I did this calculation a few years ago, I found my value was close to the mileage deduction back then (it was 40-something cents) but that was before the spike in fuel prices. For comparison’s sake, my value for gasoline back then was 7 cents a mile based on a car that was running around ~32 miles to the gallon (Acura Integra and I was doing a significant amount of highway driving).

How do you use this number? Let’s say it’s 280 miles between my home in Maryland and my parent’s in New York. The tolls between Maryland and New York, I believe, are around $60 a round trip. Given the cost of fuel alone (7 cents a mile), the cost of the trip is over $100 compared to the cost of a Southwest flight that can be bought for $39 a round trip. So, driving alone would cost over a hundred dollars and nearly 5 hours - flying would cost ~$100 and 3 hours… it’s a no brainer and the math is facilitated by knowing the cost per mile.

Finally, your car’s cost per mile is only part of the story. In my drives to Pittsburgh or to New Jersey, tolls played an important role and often threw the entire equation out of whack. Back then, the toll for the Pennsylvania Turnpike was around $8 a round trip and nearly $50 a round trip to New Jersey. Another factor was time. I could take a $15 Chinatown bus from Baltimore to Grand Central in NYC, then jump on an Amtrak train out to New Jersey… but it would take me like 15 hours to make the trip and time is money! (and back then, that was time I could spend with my beautiful soon-to-be wife, and yes she reads this blog)

(Photo by an0nym0usmuse)

With the price of a barrel of oil around $100 and the price of a gallon of gasoline inching towards $4, you’ve probably got fuel on the brain this year. If you also have a new (or new to you) car on the brain as well, you might want to know the top 10 fuel efficient MPG cars of 2008 right? Well, if you scour the EPA fueleconomy.gov website, you’d get the following list of top 10 (with ties) cars.

But, before we hit the actual list, here are some interesting, but not surprising, points worth noting:

• All vehicles have 4 cylinder engines.
• All mileages are based on the new EPA MPG testing guidelines.
• The average is a weighted average based on 55% city driving, 45% highway driving.
• A lot of Toyota’s and Honda’s on the list but there are some American cars on the list like the Ford Escape Hybrid and Mercury Mariner.
• The first seven cars on the list are hybrids, three of those are SUVs!
• All of the cars are capable of going over 30 MPG.
• The number #1 vehicle, the Toyota Prius, has a starting MSRP of $21,200 (but you have to get on a waiting list!).
• The number #10 vehicle, the Honda Fit, has a starting MSRP of around $13,950 - very reasonable for a 30.2 MPG (if that truly is important to you).

Curious about what #11 was? Not too exciting, it is the Automatic transmission version of the #7 car, the Toyota Corolla.

After spending two and a half weeks in Hawaii, I’ve to appreciate driving slower. The first week was spent on the island of Kauai, an island that, to my knowledge, doesn’t have a road wider than two lanes on each side. The next four days was spent on the Big Island of Hawaii, which to my knowledge doesn’t have a road wider than three lanes. It wasn’t until reaching Oahu did we finally encounter what would be considered a highway (and it was a doozy, HI-1 is four lanes each way, sometimes more I think). On each of the other islands, I think I peaked at 55 MPH and that was only briefly. Part of the reason was because we were on vacation and took scenic routes - there’s no sense flying by at 70 MPH on a scenic drive; part of the reason was that you simply couldn’t drive 70 MPH on many of the winding roads. So that got me thinking, what do you really get out of driving 70 MPH? The answer is - wasted gas and not much time savings.

According to the US Census Bureau, in 2006 the average time to commute from home to work ranges between 15 and 31 minutes. New York had the longest with 31 minutes and North Dakotans won with a mere 15.5 minute commute. The average was 25 miles.

The time you save between driving 55 MPH for the entire 25 miles, unlikely, and driving 75 MPH is seven minutes. It will take you about 27.3 minutes to travel 25 miles going at 55 MPH. At 75 MPH, you finish the trip in 20 minutes - a total savings of seven minutes. If you drive 65 MPH, you save only 4 minutes. So all that speeding, weaving, bobbing, and cutting off that you may do, in order to maintain that 75 MPH cruise, saves you a mere seven minutes. If the minimal time savings isn’t a deterrent (7 minutes out of 27 minutes is over 25%, so it’s relatively large), let us take into account some other factors.

Speeding Ticket

In 2002, the average cost of a speeding ticket was $150 according to CNN Money. Assuming inflation of 4% each year, the average cost can probably be extrapolated to be closer to $190. The time it takes for a ticket to be issued probably takes around 20 minutes, based on nothing but guesstimation. Let us assume that the probability you get a ticket is 0.1%, or one every three years, again also based on guesstimation. That means that the “cost” for speeding is 20 cents and 1.2 seconds each trip. The annual cost, if you assume 50 weeks of weekday travel, is $50 and five minutes. While not substantial, who wouldn’t want an additional $50 in their pocket? (This doesn’t take into account the cost of losing 20 minutes of billable working time, which would take into account your salary, so it’s a little more than $50 a year)

Accidents

I won’t, because it’s too complex a problem that cannot be simplified enough to be of significant value, go into the financial and time cost of accidents the same way I did with speeding tickets. Suffice it to say, accident severity greatly increases when the speed of the vehicles is higher. I don’t know enough about traffic statistics to conclude that accident probability increases with speed but I wouldn’t be surprised if that was the case. Even if those could be quantified, I’m not going to try to research how much a life is worth, which is a pivotal calculation for insurance companies, so I’ll leave it up to the experts. Either way, by driving fast, you are risking accidents and accidents cost time and money immediately and in over the long run (increased insurance costs).

Gasoline Consumption

It is generally understood that driving the speed limit is the most fuel efficient speed. According to the US Department of Energy, for each 5 MPH you drive over 55 MPH, you lose 6% of efficiency. That’s a whopping 24% if you drive 75 MPH, as in our earlier example. So, if your gasoline costs you $3.23 per gallon, you’re really paying closer to $4.00 per gallon. To drive this home, let’s compare the fuel cost of your trip to work with the 55 MPH speed versus the 75 MPH speed.

If your car gets you 30 MPG, a very generous assumption, then your 25 mile commute at 55 MPH will cost you 0.83 gallons of gasoline which is $2.69. In other words, it costs you $2.69 to drive to work. If you drove it at 75 MPH, your fuel efficiency drops such that the cost per effective “gallon” increases to $4. Now your trip costs $3.32, or 63 cents more. If you make this trip 250 times, that’s $157.50 extra each year on gasoline just for getting there 7 minutes sooner. (The math here is a little fuzzy in the sense that we’re just increasing the cost of the gasoline rather than keeping that constant and affecting the MPG, the reason for this is just to keep things easier. Ultimately the math isn’t ever going to be this clean so I think it’s a liberty that’s fair to take.)

Summary

By taking into account just gasoline and the potential costs of a speeding ticket, we’ve seen that $200 a year can be cut out of your expenditures just by driving a little bit slower (that’s $200 based on $3.23/gal. for gasoline, it’s ever increasing!). So, if you’re feeling the pinch of fuel prices, consider something as simple as driving slower. If you’re concerned about those seven minutes, just leave home seven minutes earlier!

One of my friends had a car that she loved but had to bring into the shop every three or four months, like clockwork, for one problem or another. This wasn’t some car she bought used on Ebay or some shady car dealership, this was a brand spanking new vehicle. I won’t slander the manufacturer by saying who made it but suffice it to say, the brothers on CarTalk have complained frequently about it’s expensive ball joints. So, knowing she’d been to the dealership so many times I wondered what the lemon law actually covers and what it means (in Maryland, the laws may differ for you wherever you are).

In order to qualify for protection, your car must be less than fifteen months old with less than 15,000 miles on it and either owned or leased by you and registered in Maryland. (If it’s registered elsewhere, check that state’s lemon laws) Now, this usually puts you within the manufacturer’s warranty so they should fix pretty much every problem you bring them. If they can’t, that’s when the lemon law protections come in.

First, write your dealer or car manufacturer a letter requesting the repair and send it via certified mail. If the manufacturer refuses to repair the problem with thirty days or if they do complete repairs and it “impairs the use” or “substantially reduces the market value” of the car, then you may qualify for a refund or replacement vehicle as long as the problem is from the following list:

The problem list is:

• A brake or steering failure that was not corrected after the first repair attempt, and that causes the vehicle to fail Maryland’s safety inspection; or
• Any one problem that substantially impairs the use and market value of the vehicle that was not corrected in four repair attempts; or
• Any number of problems that substantially impair the use and market value of the vehicle that have caused it to be out of service for a cumulative total of 30 or more days.

If you qualify, you’ll want to write a complaint to the manufacturer with the following information (sending it via certified mail!):

• List the make, model, year and VIN of your vehicle.
• Include the name of the dealership from which your automobile was purchased and the date of purchase.
• Describe the problem you are having.
• Describe what you have done to address the problem and include copies of repair orders and dates of repair attempts.

If the manufacturer can’t correct the problem you outline within 30 days, they are required to repurchase or replace your car. If they repurchase it, they must cover the full purchase price plus license fees, registration, and any other government charges and they have the option of reducing it by 15% because you got to use the vehicle and a “reasonable allowance” for damage outside normal wear and tear. if you

If your car is a lemon and the manufacturer is unable to correct the problem within 30 days of receiving your letter, the manufacturer must repurchase or replace your vehicle. If you previously contacted the manufacturer, you will want to send a follow-up letter by certified mail, return receipt requested, outlining your problem, the steps you have taken to resolve it and what action you want taken. (See sample letter C.)

The manufacturer can replace your vehicle with a comparable one that is acceptable to you, or buy it back, whichever you prefer. The repurchase price you are offered should cover the full purchase price including license fees, registration fees and other similar governmental charges. The manufacturer can subtract up to 15 percent of the purchase price for your use of the vehicle, and a reasonable allowance for damage not attributed to normal wear and tear. At this point, I’d contact the Consumer Protection Division to get their help. If you need more information, the Maryland AG office has more information.

Good luck!

This is not legal advice in anyway, I was just trying to understand the laws to help out a friend.

Money checked out Kelley Blue Book and picked out a nice top ten list of cars that retained the most value after five years. The bulk of the cars on the list are not domestics, in fact only Chevy makes an appearance with the extremely popular Corvette. The other cars on the list are owned by either Japanese or European car companies!

Toyota and VW control 60% of the list with the Scions and the Corolla representing Toyota and three VW models rounding out the top ten. As expected, a majority of the Japanese cars are on the list because of their reliability; most of the other cars are there because of high demand for other reasons. For example, KBB supposed that despite VW’s history of questionable reliability, three of their vehicles made the list.

One thing to note, KBB did identify some contradictory information. When talking about the Jetta, they said “Despite Volkswagen’s spotty reputation for reliability - the brand fairs poorly in J.D. Powers’ annual rankings of long-term dependability - its cars hold their value well.” Then in talking about the Rabbit, they said that “Volkswagen’s certified pre-owned program, recently rated the best by Intellichoice.com, may help boost resale values in the long term.”

Top Ten Cars (Retained Value)

1. Chevrolet Corvette - 50% retained
2. Honda Civic Sedan - 52%, reliability
3. Infiniti G37 - 52%
4. Mini Cooper - 52%
5. Scion tC - 52%
6. Scion xB - 52%
7. Toyota Corolla - 52%
8. Volkswagen Eos - 52%
9. Volkswagen Jetta - 52%
10. Volkswagen Rabbit - 51%

Source: Money

The one thing I don’t really like about typical gas saving tip posts is that they give you great tips that you’ll absolutely never use. There. I said it. Those are great tips that you will absolutely, without a doubt, 100%, take no prisoners, ignore until you’re blue in the face. You ignore them because you basically don’t like the tips. Let me get into the four tips you’ll ignore, tell you why I think you (and I) ignore them, then I’ll follow that up with some tips I think you won’t ignore (and that I don’t, mostly because they’re easy).

Drive 55 MPH

This tip is by far the one that you’ll probably ignore the most because we all like to get where we’re going as quickly as possible. In fact, despite all the studies showing that driving slowly will increase fuel efficiency, the bottom line is that when the Feds forced the 55 MPH speed limit because of the 1973 oil crisis, oil consumption dropped only 1%. You are most likely to ignore this rule because after the max speed law was repealed, most highways use 65 MPH as their limit and most highways generally operate around anywhere between 70 MPH and 80 MPH; going any slower actually puts you at risk as aggressive drivers start weaving around you.

Carpool

Carpooling obviously saves on gasoline because you use less of it. Carpool exactly one work day a week and, like magic, you’ll reduce your gas consumption! It’s absolutely brilliant in its simplicity until you actually try to carpool and find out no one lives near you and has the same schedule as you. I lived with a roommate for two years, we carpooled fewer than five times; it’s not that we hate the Earth (I recycle, I try to conserve gas like everyone else) but we had different schedules and coordination was a pain. Sometimes I had to work late, sometimes he had to work late, sometimes I had to come in early, etc. At under $3/gallon for gasoline, carpooling’s PITA factor outweighs the cost savings. I still try to carpool when its convenient, trading beers for rides into Baltimore, but the day to day thing simply doesn’t work well.

Reduce Weight In Trunk

I’ve heard this tip over and over again and some people even advise that you take the spare out of your trunk to save on fuel! Again, a great tip if you have cinder blocks in your trunk but generally I don’t think I have more than 10 pounds of “stuff” in my trunk (not counting the spare, which is staying in there no matter what). This tip is great in principle but fails in practice because I think most people have a reason for the stuff in their car’s trunk. Even the people with tons of junk in their trunk have a good reason for it and often won’t have it filled with stuff that’s both unnecessary and unbelievably heavy.

Buy A Smaller Car

Great tip… except you already have a car. It’s a great tip on paper, buy a smaller car and you will use less gasoline both today and in the future. It ignores one important fact though: it’s hard to sell a car and then buy a new one. In fact, buying a car is regarded as one of the more stressful decision processes a human being can enter into (second to probably buying a house and getting married, this is of course a statistic I made up but you’ll probably agree with me) and it’s not something that happens trivially. If you could swap your gas guzzler for a svelte gas sipper I’m sure you would, but it’s not as simple as that. This is like suggesting you trade in your wife or husband to someone more attentive or more attractive. Seems good on paper until you try to do it. This is probably the most ridiculous tip.

Tips You’ll Use

Now that you’ve heard the four tips that I think are good but most often ignored, here are five tips that are simple and something you’ll actually do:

1. Scan GasBuddy Before Fillup: You can probably get to a computer before you hop into your car to fill up the tank on your way to or from work, so jump onto GasBuddy (or your gas station search of choice) and find the one along your route that has the cheapest gas.
2. Use the correct octane: If your car says that you should use premium, use premium. If your car says regular and you’re using premium, you’re wasting your money.
3. Ensure your tires are properly inflated: The statistics vary but it’s estimated you can lose ~6% fuel efficiency if your tires are under inflated plus they have a reduced life because of uneven wear. Keep your tires inflated and drive 155 MPH and you’ll still come out on top.
4. Change your oil regularly: This is an easy step that keeps your engine operating at peak performance, keeping all part lubricated and all the junk out of your oil. Only do so at the schedule in your manual, ignore that 3,000 mile garbage (unless your manual says so).
5. Change your air filter: This is another one of those simple maintenance tasks that will save you up to ~10% fuel efficiency. If your engine is starving for air because your filter looks like Snoop Dogg’s lungs then you’re wasting a lot of money for no good reason.

Photo by sxld.