Edmunds.com has a new Gas-Guzzler Trade-In Calculator that helps you figure out the pay back period and fuel saving associated with trading in a vehicle for a new more fuel efficient one.

“A common example demonstrates the potential pitfalls of ditching that SUV: A consumer trades in a four-year old GMC Yukon, worth $13,483, for a new $21,647 Toyota Prius. The difference is $8,164. If the consumer drives 1,200 miles per month and gas costs $4.07 per gallon (national average), the monthly fuel savings will be $201.34. While this may seem attractive, it will take 41 months to pay back the additional cost of the Prius over the trade-in value of the Yukon.”

Considering a Prius would probably cost more than $21,647, the pay back time is even longer especially if gas prices fall. Consider regular high mileage compacts such as the Honda Fit.

Also consider a recent (2 or 3 year old) vintage fuel efficient preowned car.  The biggest cost in owning a car is depreciation at almost 50%, followed by fuel costs at near 20%.