Huge difference.
Really.
Automotive OEMs consider that average Americans to drive 12,000 miles per year. At 15 mpg, that means Mr. Pickup driver will use 800 gallons X $4.00 = spending $3,200 per year.
At 25 mpg, he would use 480 gallons per year x $4.00 = spending $1,920 per year.
A savings of $1,280. Huge, as you say.
Mr. Pickup driver is in the chips with that kind of savings. Except his pickup truck with the low mileage is worth little. Lets say he has a 3 year old Dodge Ram 2500 pickup. Which is worth around $12,000 to a dealer for trade in. Probably cost him $28,000 when new and he still may owe more than what it's worth ( called upside down in the industry), but we'll assume he breaks even-- loan left to pay versus trade in.
He then goes to buy a Toyota Camry which gets 21 mpg city and 31 mpg highway. So we'll call it 25 mpg average. If he can find one at a dealer he will probably pay around $25,000. Maybe more.
Well let's see, his truck nets him $12,000, he buys a new Toyota for $25,000--that's $13,000 difference. Without getting into interest and payments, He would have to drive the Toyota over 10 years--saving $1,280 per year on the difference in mileage between his truck and the Toyota just to break even.
Now if you actually throw in what he pays over a 5 year loan on 25,000, then just how many years will he need to drive the Toyota to pay for the entire car--not just the difference in value of his trade versus the new car. You are looking at $25,000 loan for 5 years ( 60 months) at 6% = paying $29,000 over the course of the loan. Or about 23 years of saving $1,280 per year on the difference between 15 mpg and 25 mpg.
So yes---the savings are huge between 15 mpg and 25 mpg----provided you can afford it.
