Discussion: Investing in Efficiency - Car or House?

A reader who goes by the name of Sorin sent us a very interesting email (in case you didn't know, you can do the same by clicking on "send us tips" on the right). His arguments are very convincing and we think that they need to be heard. Instead of paraphrasing him or her, we are publishing the whole email below.

Reading the consumer reports review of fuel efficiency, and all the talk of people going out to buy more efficient cars got me thinking. In some cases, it may be more environmentally sound and financially prudent to *not* buy a more fuel efficient vehicle.

If someone spends $25,000 for a new car with a higher MPG rating, they might actually find a better return on that $25,000 by investing in solar or wind generation for their home, or in other energy efficient home improvements. For about the same cost as a new fuel efficient car, it's possible to outfit a house to produce most or all of the energy it uses. The savings in the electric and heating bills will probably be more significant for most people than the savings in gasoline with a more efficient car. I feel like it's worth calling out since there is a tendency to look at the immediate problem (high gasoline cost) and not consider that the money required to address that problem might actually be able to create more savings if it's invested elsewhere. Don't forget that the cost of natural gas and heating oil is going up right along with the cost of gasoline. Most people just won't notice it until winter.

- You'll probably have the car for 10 years or less. Solar panels generally come with a 20 year warranty, and have a potential useful life that is far longer.

- Consider your home energy bills vs what you spend on gasoline. Also consider that if you spend $300 a month on gasoline, and buy a car that is 50% more efficient (say 30 MPG instead of 20) you will only be saving $100 a month on fuel. You might be able to save just as much by investing in new insulation, and increase the value of your home at the same time. A roof water collection system can also save on your water bill.

- The environmental cost of producing a new car, and disposing of an old one is significant.

Sorin

Your homework for this week (the first "treehugger homework" can be found here) is to think about this, and to see if it applies to your life. Is there really bigger fish to fry (as a vegetarian, that expression sounds a little weird...) that you might have overlooked? What will you do about it?

Nothing keeps you from coming back to the car or whatever else later, but it's hard to argue against starting with what has more impact, especially if it will reduce your monthly bills and eventually help pay for that fuel efficient car while reducing considerably your ecological footprint. It's common sense, but it is easy to get sidetracked by more desirable things that we want now, even if they are less important in the grand scheme of things.

We would really like to hear what our readers think of this. Please don't hesitate to leave your thoughts in the comment section below.