Trading truck to save gas can be expensive Ask Dr. Don by Don Taylor, Ph.D., CFA, CFP • Bankrate.com

Dear Dr. Don,
A year ago we bought and financed a 2005 Nissan Frontier truck with a V-6 engine. While we do need a truck, a four-cylinder Frontier would still meet our needs and be better (by six miles per gallon) on gas, as well as have lower maintenance and insurance expense. Should we pursue getting rid of the V-6 in favor of the truck with the more-efficient engine? We plan to keep our truck for at least 12 years.
-- Patrick Pickup

Dear Patrick,
Second-guessing a new auto (or truck) purchase is always a dicey proposition. You take such a big depreciation hit when you sell a vehicle in the first two years that it's hard to make economic sense out of selling it to reduce your operating expenses by buying a new truck.

I don't have the depreciation estimate for your 2005 Frontier but a 2006 Frontier XE, four-door King Cab SB with a 2.5 liter four-cylinder engine and automatic transmission is expected to depreciate by $4,610 during the first year you own it, according to Edmunds.com. Subtract that from the $16,950 manufacturer's suggested retail price (MSRP) for the truck and you'll see what I mean about a big depreciation hit.

Talk to your insurance agent and see what the rate differential is between the two trucks. Your agent might prove me wrong but I doubt that it's enough to justify buying a new truck. The same goes with the maintenance expense.

A six miles-per-gallon difference when gas is $3 per gallon costs you about an extra $520 per year if you drive 15,000 miles per year. Here's what it looks like when you run the numbers:

Miles-per-gallon difference

An economist would argue that you've taken the depreciation hit whether or not you recognize it by selling the truck, but the economist doesn't have to pay off your truck loan with the proceeds from the sale. Not to mention how buying a new truck puts you in the exact same situation once again: You face another big, first year of depreciation.

Selling your used truck to buy a used truck gets you out of that trap and can work if you can find a quality used vehicle. My recommendation is to wait it out a year or two to both bring down the loan balance on the truck and spread that upfront depreciation over a couple of years of use.

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