Soaring gasoline prices led Susan A. Sylvest to consider giving up her 2007 GMC Yukon — fondly named "Betsy" — for a smaller vehicle.
"At first blush, it seems like a really great idea — sell my beast and buy a puppy," said Sylvest, who makes a 45-mile round-trip commute daily from her Coppell, Texas, home to her Dallas office.
But after crunching the numbers, Sylvest, a partner at financial planning firm Murphy & Sylvest LLC, discovered the savings would be outweighed by several costlier factors.
So she's sticking with Betsy.
Many consumers may be contemplating a similar change as gas hits $4 a gallon and fillups cost $100. But, experts say, most consumers should resist the urge to quickly trade in their gas guzzler.
"If you have a large SUV and are wondering whether to trade it, I would say absolutely not unless something dramatic has changed in your life — like the miles you drive daily," said Jesse Toprak, vice president of industry trends and insight at TrueCar.com. "You're trying to buy something that's hot and trade something that's not — which is not a good scenario."
Do the math, say the experts, and factor in more than just gas costs. Take what you pay monthly for your current vehicle, including insurance, and compare it with the monthly costs of a new vehicle.
Say you drive a Suburban that averages 15 miles per gallon and you commute 30 miles daily to and from work. At $4 a gallon, your daily gas cost is $8.
If you traded the Suburban for a small sedan that averaged 30 mpg — probably accepting too little for the Suburban and paying too much for the economy car — your total gas savings would be $4 a day, about the cost of a Starbucks coffee.
And you'd no doubt also be facing a monthly car payment and higher insurance costs.
"If you have a 5-year-old SUV that's worth $10,000, one temptation might be to buy a really fuel-efficient car for $20,000, but you're spending an extra $10,000, plus your insurance costs might go up, plus you might be financing," said Jeff Bartlett, online deputy editor for Consumer Reports.
"A new car may provide better safety and it may be more reliable, but that $10,000 — if money is the whole motivation for doing this — can buy an awful lot of gasoline."
Here are some factors you need to consider before dumping your gas guzzler for a smaller vehicle:
"Buying a new car will bring monthly car payments with it," said Greg McBride, senior financial analyst at Bankrate.com. "If you borrow at low interest rates, the gas savings can offset the interest costs pretty quickly, but from a cash-flow basis, you've got this new car payment for the next five years instead of the vehicle you owned free and clear."
Even if you plan to buy a small car with cash, you'd be out that money.
If you're still making loan payments on your vehicle or are leasing, making the move to a small car could leave you owing more on your vehicle than it's worth.
Rapid increases in fuel costs are typically followed by swift declines, said Jerry Reynolds, a former Ford dealer who hosts the Jerry Reynolds Auto Advice Show on radio.
Consumers who "panic-trade" a large vehicle such as an SUV for a small one often regret it, he said, frequently trading back into large vehicles when gas prices fall.
And they typically lose thousands on both transactions, "which will buy one heck of a lot of gas," Reynolds said.
In three years, the average new car loses almost half of its value — 47 percent — with the most severe hit taken in the first year, Bartlett said.
"Once it leaves the dealer, it transitions from being a new car to being a used car, at which point its whole status changes," he said.
By the end of the first year, the typical new car has depreciated 30 percent, said Phil Reed, consumer advice editor at Edmunds.com, an automotive information website.
New vehicles generally cost more to insure than older ones because the value of the new car is higher. Also, auto lenders' requirements that new car owners carry collision coverage — which experts advise you to drop on an older vehicle — will push insurance costs higher.
Reed said consumers could see their insurance costs as much as double with the purchase of a new vehicle.