With the sky rocketing gas prices, are you considering trading in your car for another one with better gas mileage? If you are leasing, you may consider turning in your lease for a different one. Have you done your homework to know whether or not it is really a cost effective move? You know you will save money on gas but have you factored in the cost of what you still owe on your vehicle? There are additional hidden fees that you might not have considered and should take a look at before making any decision.

Things you will need to know in order to make your decision. What is the trade in value of your current vehicle? What part of the country you live in can alter the cost of your trade in so using a generalized amount could throw off your calculations.

What is the cost of the new car you are considering? This amount can either go up or down depending upon what you owe on your trade in or what you can get for your trade in. Is trading in at the dealership you are going to buy at the best option? It might be the easiest option but it might not bring the highest dollar amount.

Other considerations would be in the use of gas. How many miles do you drive in a month? What is the MPG of your current car and what is the MPG of the car you are considering? What is the current price of gas? And finally, you can calculate the amount of money you can save on gas per month. How fast will this amount offset the price of the new car? What is the number of months it will take to break even with your trade and then begin to save money?

You will also want to look into the cost of insurance for the new car. If it is considered a sports car, you may end up paying more for insurance. If your new car is a hybrid, you may save on insurance.

Another fee to add into the mix is the transfer of title and getting a new license plate. This amount will vary by state. It may not be a lot but you should still consider it in your calculations.