Double your tax cuts

The TV3 "Campbell Live" (June 4th) clip below highlights the decline of the big car as an attractive mode of conveyance for many people. Small cars are selling at a premium while big cars attract less interest or languish unwanted on auction floors. One comment in the piece is that the difference in the fuel bill between a big car and a small car may be $500 to $800 per year, while selling your petrol hog may crystalise a loss of many thousands of dollars. That sounds like a car salesman trying to have a bob each way, but let's use those numbers.

That logic appears to offer the worst of all worlds. By keeping the bog car, you keep your notional thousands that you will never actually realise while paying out between $10 and $16 more each week on fuel per big car. Many families operate more than one vehicle with if there are two adults working.

I'd rather have the cash-in-hand weekly savings now, thanks, than the imaginary dollars on wheels. If your fuel savings were to be in the upper range quoted (and some people may save even more), then you've effectively given yourself a "tax cut" right now in addition to the $16 / week we'll get in October via tax cuts.

If you're a two car family, you could be looking at $30 / week or more in savings to the household budget. That easily pays for your monthly SKY subs and lattes for two a couple of times a week.

Thinking further, I suppose some people may be stuck with the big car if they borrowed money to buy it and would be left with negative equity if they sold it. Not a nice position to be in, locked into paying interest on a rapidly depreciating a set that is costing more every day to run due to higher fuel costs. These are often the folks who would benefit the most from unloading the fuel guzzlers.