I just accepted a new job. It will require lots of driving with mileage reimbursements. The reimbursement rate is 55 cents per mile. I currently drive a honda crv to work it averages about 25 mpg. I owe around 7k on it. Would it make financial sense to get a car getting closer to 35 -40 mpg even if you spent 10-15k on it? The advantage of the crv is it's a good little hunting rig to pull a 4 wheeler to the club. What would my aldeer brethren recommend?

At .55 cents a mile you will make money enough to make a new car payment if you drive much at all. Figure up your monthly miles and plug the numbers in.

Wife made enough to pay for a car and keep the Tahoe going from 14 mpg to 36. She drives 120-150 mile 3 days a week. It actually made us a little money.

Ok I did the calculations:

If you drive 25,000 miles a year, going from 25 to 35 mpg only saves you $1,000 a year.

You'll make $13,750 off that mileage and only spend $2,500 to 3,500 on gas.

.55x25miles =13.75. Gallon of gas avg. 3.30 a gallon. 13.75-3.30=10.45. Take the money your making on mileage and get the CRV paid off and have no car payment. My .02.

I would run the CRV until the wheels fell off, and then buy something else. Like Yek said, you will be making money at $.55/mile. Put your mileage money in a seperate account and use it to maintain/pay for your vehicle, and then pay cash for the next one.

From what you are saying there is a $7K premium to buy a new vehicle, that will get 10 mpg better fuel economy. It will take a long time to save $7K in fuel to justify the purchase. If you know the miles you will be driving it would be easy enough to figure out.

Depends on how many miles you are talking about and what other expenses you will incur, like another hunting rig, insurance, things like that. Let's say you drive 20k per year. That's about 11k in mileage money. If you get something that gets 50% better mpg that's about an extra 1000$ per year in your pocket.

I traveled for seven years. Drive your car until it gives you problems. Take the mileage money and put in a different account. Use that to buy a car when you have enough cash. Don't go in debt for a new car with a new job. You might not like the travel. I HATED missing everything that was happening with my family. Good luck on the new job.

Thanks for the replies I have no clue as to how many miles a month the travel will be. Most if not all will be in state.

My financial advice would be to minimally invest in depreciating assets. Depreciating asset is an oxymoron, I view my vehicles as tools.

Not to derail the thread, but what new job have you taken? You had a great track record at school and always got great scores! Probably one of the best in the system. It had to be a great offer because you were "The Man" at school. Good Luck with the new job.

When I did the Homebound Program in Colbert County for kids who could not attend school I received 32 cents per mile and I was driving a Toyota Celica that was getting about 35 miles a gallon. I really had no gas bill anyway and I used the gas allowance to entertain my wife every month. That gas allowance made momma happy.

I used to have a job that paid for my mileage. By the time you factor in every expense you will break even. All those once a quarter an bi-annual services will now become once an month and quarterly.

I would pay off the CRV before buying anything else. What if the new job doesn't work out? You would be stuck with another car payment.

If you are putting your vehicle into service for work and the majority of the driving will be for work, can't you also deduct from your taxes all or a portion of maintenance - tires, engine service (oil, etc.), other upkeep - as well? All that would add up.

I wondered the same thing Clem.

You have to claim the mileage reimbursement as taxable income. Then, you can keep a log and take a deduction for the allowable per mile tax rate; I believe that is .58 cents a mile.

An electric car might be a money maker for you. I have a friend who commutes about 100 miles a day in one and his payment ($199/month) is lower than what his fuel bill would be.

Did his electric bill increase?

Run the CRV until it dies, after that you should be an established employee and buy a jeep or Tacoma.