Downsizing: Right-sizing the sedan fuel bill is no easy challenge

When it comes to downsizing, it's not just SUV owners feeling the pain of high gas prices at the pump today. Many large sedan owners also feel the drive to reduce their operating costs, and our analysis shows there are real ways to save, if you avoid the pitfalls.

Jesse Toprak, a pricing and sales analyst with Truecar.com, says the one of the most common vehicles traded in today on something more efficient is the Chrysler 300. The pre-2011 Chrysler 300C, with a 5.7-liter V8 engine, got 16 mpg in our testing. At today's prices of $3.70 a gallon for gas that means typical owners would pay an estimated $2,775 for fuel a year, based on 12,000 miles per year. It's easy to see how an owner could get frustrated with that kind of outlay.

And fuel economy in sedans have advanced a long way since the 300 was introduced as a 2005 model. The latest Nissan Altima 2.5 S, our top-rated family sedan, for example, gets 26 mpg overall. It is also a nice-driving, roomy sedan that's easy to live with. The new Hyundai Sonata GLS, with its four-cylinder engine, is a sportier midsized option, and gets 27 mpg. And if you're really serious about mileage, among small sedans you can't beat the 32 mpg Toyota Corolla.

But the question is, would the savings those cars offer at the pump offset the extra depreciation cost of buying a new car?

Unlike SUVs, which offer a bigger gas savings, most of the scenarios we tried for saving the hapless 300 owner some money didn't help. Using Consumer Reports' comprehensive owner cost data, we found that a new Altima or Sonata, even with a 10 and 11 mpg improvement, respectively, depreciate too much to offset the fuel savings. Considering all owner costs, including depreciation, fuel, insurance, interest on financing, sales tax, and maintenance and repair, buying the Altima would cost an extra $1,500 over three years versus just holding on to the 300. The Sonata would add only $550 in that timeframe. You'd have to downsize all the way to the Corolla to save any money - but then the savings would be a significant $4,146 over three years. If you want even bigger savings, you could consider a Toyota Prius hybrid, which costs more than a Corolla but could save you $4,500 over three years with its excellent 44 mpg. With all these examples, good reliability and fuel economy would conspire over time to reduce overall operating costs, but as with all vehicle ownership, it takes a long-term vision to see the benefits. Short-term gains are elusive.

We picked the 300C for this example because it gets among the worse fuel economy of the sedans we've recently tested. (However, it is worth noting that its maintenance and repair costs are better than many sedans.) If you have something a little more efficient -- even the Chevrolet Impala with a V6 engine gets 20 mpg -- holding on to it until the vehicle truly needs to be traded in is the cheapest option in the long run, even at $3.70 per gallon for gas.

When it comes to sedans, the best strategy for saving money is to hang onto your current car for the rest of its useful life. Most sedans have had standard or available curtain air bags since 2005 or 2006. By then, you'll have had a few years to accumulate savings without a car loan, and fuel economy and safety will have made further advances.

Related:
How higher gas prices impact that appeal of car downsizing
Lessons in car downsizing
Downsizing: Choosing a used car to save gas and money
Downsizing: Right-sizing the sedan fuel bill is no easy challenge
Downsizing your SUV for better mpg—does it make cents?
How to know when it's time to downsize your car
Downsizing: The 12 most useful cars per mpg

—Eric Evarts