Downsizing the Car to Help Pay the Mortgage

Okay. The title of this entry is sort of kidding and sort of not... In all seriousness, I am really wondering about buying a compact car though. Have you seen the price of gas these past few days? I don't know about you, but I'm staring $3 a gallon in the face.

I saw a graph in the newspaper over the weekend, and realized that the cost of just putting gas in my car has risen over 30 % since January. Since January! That doesn't include the cost of my insurance (which went up a bit), or the cost of repairs (which are always going up it seems) nor the cost of oil changes (and you can bet that if gas is going up, engine oil will be skyrocketing too.)

If the household fleet (the wife's car and my own) are going to start eating up a bigger part of the budget, then the budget is going to be put out of balance. That's not good news for us or anyone else coping with this double-digit increase in the cost of fuel. After all, for most of us, the money coming in the door is a limited quantity. If gas takes more money, something else will have to get less.

At the moment, we pay a bit more on our mortgage. You know -- if you increase your payments by even a small amount, you can save a lot. My wife and I both like the idea of saving, so we make the effort. We don't pay a lot more -- I think we've increased our payment by a modest 10% -- but these gas prices are actually putting that in jeopardy!

So, the question is: Pay less on the mortgage to cover the gas, or pay less in gas and pay off the mortgage early? For me, there's no contest. The big family car will have to become the mid-size family car.

May seem a bit radical, but there are no guarantees that now that gas is up, that it will ever come down. Also, it won't just be gas that gets more expensive. It will be higher costs on the food that gets trucked to my local supermarket. (After all, the truck requires fuel.) It will be higher costs on flights for our annual southern migration. (Well, maybe not this year. New Baby Number 2 is due in January.) It will be higher costs on all kinds of things that get shipped across the country. Those higher costs will be passed onto me.

Well, I've always loved big cars. It won't be my favorite thing to "downsize". But if I have to pick between gas and my mortgage, there's no contest.


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