As seen on the web at CNNMoney.com.

The hassle-free holiday flying guide
With fewer flights, more fees and a 20%-to-40% hike in fares, you need a serious strategy.

By Carolyn Bigda and Donna Rosato, Money Magazine
October 14, 2008: 5:24 AM ET

(Money Magazine) — Santa’s got a good thing going travelwise, what with that high-speed reindeer-powered sleigh that takes him to every chimney on the globe in mere hours – no layovers, no delays and no shortage of under-seat storage. You might want to thumb a ride with the old boy, in fact, because flying the nonfiction way isn’t going to be so jolly this holiday season.

For starters, Thanksgiving and Christmas air fares are up 20% to 40% compared with years past, according to Rick Seaney, CEO of FareCompare.com. That’s in part because most airlines cut 10% to 15% of their capacity this fall in reaction to fuel prices, which reached record highs this summer.

Fewer flights mean fuller planes, less space in the overhead and a greater chance that a canceled flight will leave you stranded for days. The Scrooging doesn’t stop there, thanks to the bevy of new fees. (Want to check a bag? That’ll be $15. Care for a bottle of water? Fork over two bucks.)

To help you get to your destination with your holiday spirit mostly intact, we interviewed reams of experts and dug up the smartest strategies for every stage of the process: booking cheap(ish) tickets, packing to avoid fees, speeding through security and managing delays. Merry flying to all and to all a good flight!

Stage 1: Book like a pro

Start shopping this Monday. Because of the recent capacity cuts, carriers have fewer empty seats to sell, torpedoing the usual advice to buy tickets at least three weeks in advance. This year aim to book six weeks ahead, says George Hobica, who runs Airfarewatchdog.com. In other words, now. The best time to shop: a Monday or Tuesday, as airlines typically lower fares early in the week and raise them on Friday.

Search the whole Internet. Start with comprehensive fare search engines like Kayak.com and ITASoftware.com that scour the Web for the best combination of schedule and price. (Just be sure to nix potentially problematic flights such as red-eyes and those involving multiple carriers on one route. Kayak lets you filter these out, but ITASoftware doesn’t.)

Drive, then fly. Fares from small and mid-size cities (think Manchester, N.H., Eugene, Ore. or Bloomington, Ill.) are up more than those from big cities. If you live in this kind of place, it may be worth driving a few hours to a larger airport. Going 120 miles in a 2006 Toyota Camry with $3.80-a-gallon gas will add about $38 round trip – pennies compared with what you may save. Since parking might be more pricey at a bigger airport, go to pnf.com and check out Park ‘n Fly, a cheap off-site option in many cities.

Fly against the grain. Thanksgiving, Christmas and New Year’s Day will all fall on Thursdays this season. For Turkey Day, as usual, it’ll be most expensive to fly out the day before and return the Sunday after. For the other holidays, leaving on the Friday, Sunday or Tuesday prior and coming back Sunday will be most costly. To get a better price, try adjusting your departure and your return to avoid those dates; you can sometimes save hundreds of dollars that way. Use FareCompare.com to see how different travel dates will change the price of your itinerary.

Find the secret specials. Once you find a flight you like, search for it on the airline’s site to make sure you’re not missing a deal. (To reduce commissions to sellers, airlines are increasingly saving the best prices for their own sites, posting specials that search engines can’t pick up.) Also go to the Discount Airfare section on Airfarewatchdog.com. Hobica manually collates airlines’ exclusive Web specials and e-newsletter offers. “A lot of the best deals are unadvertised and short-lived,” he says – such as a recent two-for-one deal on Virgin America and a $399 Denver-Honolulu round trip on Frontier.

Delay-proof your itinerary. With fewer flights, it’ll be harder to get on the next plane out if yours is delayed or canceled (a risk in snow-and-sleet season). Check on-time performance of flights you’re considering at Flightstats.com; skip those with bad records. The first flight of the day is generally the best bet, as you won’t get stuck behind other delayed planes. If you have a choice of connecting cities, pick the one with the warmest climate – and avoid those listed in the chart above right.

But prepare for reality. Fly at least 24 hours before you need to be back home, and if you’re connecting, be sure your layover is at least two hours. Before you go, check the Web to find out the time of your carrier’s next flight as well as a similarly timed one from a competing airline. Write them down. If you’re delayed, knowing the alternatives will be valuable when you’re trying to rebook.

Check the odds. For most flights, prices will keep rising as the holidays get closer. There are a few exceptions, however, so once you’ve picked a flight, vet it at Farecast.com, which uses historical data to tell you if the price is likely headed up or down. Unless Farecast is at least 60% confident that it will fall, book now.

Get a good seat. Before you select your seat assignment, go to seatguru.com to find out which seats on your aircraft will be most – and least – comfortable. Also, some airlines, including Delta and JetBlue, allow you to pay for a roomier seat (up to 38 inches vs. the average 31). The investment ($5 to $100, depending on the airline) may be worth it if you’re tall or claustrophobic.

Stage 2: Pack efficiently

If you’re able to carry on…Making carrying on your default option will save you a lot of stress. It’s the only way to sidestep the checked-bag fees that most of the major airlines recently announced (see chart above right). Plus, you won’t have to worry about luggage getting lost, misdirected or mauled by handlers. Worried about wearing the same shirt for 10 straight days? Packing expert Doug Dyment of OneBag.com has mastered the art of getting a lot of clothes into a little space – while minimizing wrinkles.

Pick the right bag. That means soft-sided (easier to squeeze into unforgiving spaces), wheelless (“Roll-on bags can be triple the weight and subtract one-third of your usable space,” says Dyment) and as big as rules allow (most airlines permit 22 inches in length). One that measures up: the Red Oxx Sky Train ($255, redoxx.com), which weighs just four pounds and can be worn as a backpack. Can’t deal without wheels? Consider Eagle Creek’s Tarmac 22-inch, which weighs in at eight pounds ($275, eaglecreek.com).

Fold the right way. Lay each item of clothing on a flat surface, one on top of the other, each piece going in an alternating direction to create what looks like a plus sign. Place an object – like your toilet kit or a bag of socks and underwear – in the center of the plus sign (see Figure 1).

One by one, wrap the protruding end of each article of clothing up and around the core object until you get a round, compact bundle. “This minimizes wrinkles while maximizing luggage capacity,” Dyment says (Figure 2).

Drop the bundle into your bag. Tuck in whatever stray items (book, iPod) remain (Figure 3). You’re ready to head to the airport.

If you’ve gotta check… If you’re considering shipping your bag via a service like FedEx or the U.S. mail to save money, forget it: Checked-bag fees are usually cheaper. The best way to save money is to weigh your bag before you go. That’s because on domestic flights you’ll owe yet another fee – generally $50 or more per bag – if the weight tops 50 pounds. Just hop on your bath-room scale with your suitcase and subtract your weight (no cheating). Heck, maybe it’ll help you think twice about that doughnut at the airport too. If you must check more than 50 pounds’ worth of stuff, divide it into two suitcases: You’ll usually pay much less to check two regulation-weight bags than one overweight one.

Stage 3: Check in faster

Remember the 24-hour rule. To get an even better seat, check in for your flight via the airline’s website a full 24 hours before boarding time (don’t wait for the e-mailed reminder). That’s when airlines release the best assignments, those that had been reserved for elite fliers. Being among the first to check in can also prevent you from being bumped and help you move to the top of the upgrade list. (With Southwest (LUV, Fortune 500), you up your odds of getting in one of the first boarding groups.) And best of all, if you print your boarding pass at home and aren’t checking bags, you can head straight to security.

Get edgy. Make a beeline for the farthest-flung security checkpoint. “Those on the edges of the airport tend to be less used than ones in the middle,” says Mark Ashley, editor of the blog Upgrade: Travel Better (upgradetravelbetter.com). To determine the absolute quickest line at any airport in the U.S., go to the list from the Transportation Security Administration (TSA) at waittime.tsa.dhs.gov.

Go black diamond. This year the TSA has been rolling out security lanes labeled like ski trails (black, blue and green), meant to separate “expert” travelers from dallying families. Though it’s up to individuals to choose the appropriate lane, the honor system seems to be working. According to the TSA, the black-diamond lanes are 21% faster on average. So far 50-odd airports have the lanes; you can find them at tsa.gov/approach/black_diamond.shtm.

Swap out your laptop case. New TSA-approved laptop bags allow X-ray machines to get an unobstructed view of your computer without your removing it – saving time and hassle. The Aerovation Checkpoint Friendly Laptop Bag ($130, aerovation.com) is opaque black, weighs less than three pounds and is roomy enough for a 17-inch screen.
Stage 4: Negotiate problems

If your flight is delayed… Most airlines won’t do much for you if the problem is out of their control, like air-traffic congestion or weather. But if it’s their fault – a mechanical or crew problem – they may be more accommodating. Delta (DAL, Fortune 500), for example, says that it will provide lodging if you are stuck for four hours between 10 p.m. and 6 a.m.

It pays to know what your airline says it will do, since it may not volunteer such hospitality. Read its “contract of carriage,” which lists your rights, before you travel. Find links at Airfarewatchdog.com (click on User’s Guide and then on Info Center).

As for making a connection: If you might miss yours because of a delay at your initial airport, alert the gate agent; the airline may hold the plane for you briefly. Or if weather isn’t the issue, ask whether you can go on another flight or through a different hub. Should none of that work and you miss the plane, alert an agent. The airline must put you on another flight, but it could be a while.

If you’re bumped… As you know, when flights are oversold, airlines ask for volunteers first, offering them a later flight in exchange for a trip voucher. If not enough people raise their hands, travelers sans seat assignments, those who checked in last and, on some airlines, those who paid the least, are the first to go. If you’re tossed off, you’re entitled to on-the-spot cash compensation based on how long it takes to get you to your destination.

If your flight is canceled… The second you hear that your plane is a no-go, call the airline’s toll-free number (you have programmed it into your cell phone, haven’t you?). You’ll get rebooked more quickly than at the counter, where one disgruntled airline employee is being swarmed by a mob of disgruntled fliers. Ask what your options are. Most airlines will rebook you, gratis, on their next flight on which space is available. If that requires a long wait, ask the rep to find out whether a competing airline has seats to your destination and, if so, to endorse your ticket to that carrier. You’ll have the most luck if the flight is on a partner airline. Alternatively, suggest connecting through another city or going to another airport.

Andrew Nusca contributed to this article.

As seen on page 36 of the September 2008 (Vol. 37, No. 9) issue of Money magazine and here as a PDF.

Can I Make My Medicare Card ID Theftproof?

Q. I know you’re not supposed to carry your Social Security card. But my SSN is on my Medicare card, which I’m told I need in my wallet. What do I do? —Pat Ohlmann, Seward, Neb.

A. Medicare does indeed insist that seniors carry the card (and the agency has, unfortunately, balked at recent calls to remove Social Security numbers, claiming high costs). But the Privacy Rights Clearinghouse offers a way to follow the rules while protecting yourself from ID thieves: Photocopy your card, cut it to wallet size and cross out the last four digits of your SSN with a marker. Carry the duplicate; leave the original at home (after your regular docs have copies).

Even if you’re taken to the E.R. in an unconscious state, a hospital has ways of looking up your info, says Diane Corrigan, CFO of the Hospital of the University of Pennsylvania. “It might delay billing, but eventually we’d be able to determine a patient’s beneficiary status.”

One hopes that this won’t be an issue for future card-holders: Both houses of Congress are considering bills that mandate unique ID numbers on new Medicare cards. –ANDREW NUSCA

As seen on page 116 of the September 2008 issue (Vol. 37, No. 9) of Money magazine and here as a PDF.

Sip, Sip, Zoom
The math of car buying has done a 180. Now fuel economy is all. The good news: you don’t have to sacrifice style for miles.

Mike Allen; Additional Reporting By O.C. Ugwu; Andrew Nusca

MILLIONS OF AMERICAN DRIVERS ARE SUFFERING FROM pump shock, the symptoms of which include an unbearable lightness of wallet and a burning desire to stick the gas nozzle up somebody’s you-know-what. With gas averaging $3.93 a gallon, according to AAA, fueling an SUV can easily shred a $100 bill, and even a mid-size car swallows $70. There’s no relief in sight: The Department of Energy expects that the price of crude oil, which accounts for three-quarters of what you pay at the pump, will rise another 4% in 2009.

Desperate for an antidote, many drivers—including, perhaps, you—are circling dealer lots searching for something, anything, that will sip rather than guzzle. “Gas prices have changed the car buying landscape completely,” says Jessica Caldwell, an analyst for auto site Edmunds.com. “Interest in smaller vehicles is higher than ever, a reversal of recent years. Families are looking to downsize any way they can.”

Result: Hybrids are flying off lots. While new cars in general are taking an average of two months to sell, the low-mileage king, the Prius, has been selling out in five days, according to J.D. Power & Associates—this despite the fact that the tax credits on it have expired. With worldwide production of hybrid batteries maxed out, no one expects availability to improve anytime soon. And the demand is keeping hybrid prices at or above sticker, a sticker that averages $4,700 over a comparable regular car’s to begin with, reports J.D. Power. Pump shock is affecting conventional car sales too. “Anything over 30 miles per gallon is generally going for close to sticker,” says Art Spinella, president of auto data firm CNW Marketing Research.

So what’s a fuel-frustrated driver to do? Experts say your best value now—in terms of what you’ll pay for the car and the gas required to drive it—is not a hybrid but a conventional model with highway miles per gallon just shy of 30. Sure, you’ll spend a few hundred more in gas a year, but you pay no premium, can drive away for less than sticker and get a lot more style and pep than with a lawnmower-engine ecobox. Let’s be clear: If your main goal is to save the planet, you won’t buy a car like the Corvette on the previous spread or the Scion xB opposite. But if you’re looking to fill a more conventional need, those two—or any of the high-mileage, high-style suggestions on the next pages—will get you what you require while keeping you on the good side of Mother Earth and your accountant.

——————————
HYBRID VIGOR

5 days Average time a Prius sits on a dealer’s lot before being sold

16 days Average time any hybrid sits on a dealer’s lot

57 days Average time any new car sits on a dealer’s lot

NOTE: As of June 22. SOURCE: J.D. Power & Associates.
——————————

BUYING IN A MILEAGE-OBSESSED MARKET

Q. HOW DO I GET A DEAL ON A CONVENTIONAL CAR WITH DECENT FUEL ECONOMY?

A. First consult fueleconomy.gov to narrow your list of potential cars based on mileage; then check kbb.com to find the Kelley Blue Book “New Car Blue Book Value,” the price these autos are really selling for now. Stick with vehicles going for less than sticker, generally those in the 30-mpg-and-under range. Pick three and check them on Carsdirect.com, which allows you to select specific trim and options, then see an offer price from a local dealer. Next e-mail Internet managers at up to eight local dealers, telling them about that quote and asking if they can beat it. (These people usually cut to the chase fast.) Go for a second round with your new low. Ideally you’ll end up under Blue Book Value.

Q. WHAT ABOUT BUYING USED?

A. It depends. “Used compact cars in really good shape—like three-year-old Honda Civics—are commanding 70% to 90% of their original MSRP because demand is so high,” says Joe Phillippi, president of AutoTrends Consulting. Adds John Wolkonowicz, senior automotive analyst for Global Insight: “Buying a used Camry or Accord isn’t a great move—they hold value too well.” Your best deal: a car that isn’t in great demand but gets good reliability ratings from J.D. Power & Associates (jdpower.com), such as a 2005 Ford Focus (24 mpg city, 33 mpg highway) or Hyundai Elantra (25 mpg, 33 mpg). Both sell for less than 60% of the manufacturer’s suggested retail price (MSRP), which seems an underestimation of their real value, considering their J.D. Power ratings.

Q. FORGET ABOUT STYLE. I WANT THE MOST FUEL-EFFICIENT CONVENTIONAL CAR MONEY CAN BUY. WHICH ONE SHOULD I GO FOR?

A. Don’t mind running errands in a glorified golf cart? The Smart Fortwo coupe ($12,235) gets 41 mpg on the highway, 31 in the city. A roomier option: the Toyota Yaris ($13,110), which gets 36 mpg and 29 mpg.

Q. I REALLY WANT A HYBRID. ANY ADVICE?

A. Dealers have waiting lists for the two most popular, the Prius and the Civic Hybrid. So if you want one of these, start with the largest dealer in your area, as it gets the most inventory. Be flexible about trim, color and options; you’re in no position to be picky. Still, you’ll likely have to put your name on a waiting list; expect to pony up a refundable deposit of $1,000 or so. (As of now you’ll also pay about $1,000 above sticker on the Prius, according to Kelley Blue Book.)

If the delivery time is longer than you’d like, look beyond your area. “Hybrids are most popular in coastal states and Texas,” says Jack Nerad, an analyst at Kelley Blue Book and author of The Complete Idiot’s Guide to Hybrid and Alternative Fuel Vehicles. “Your best chance of finding one is in the Midwest.” (Of course, you’ll have to pay to get the car to you, which can add up to $1,000 to your bill.) You’ll have an easier time getting a hybrid with less cachet and fewer miles per gallon, such as the Chevy Malibu (24 mpg city, 32 highway) or the Nissan Altima hybrid (35 mpg, 33 mpg).

Q. I’VE SEEN GADGETS THAT PROMISE TO IMPROVE MY FUEL ECONOMY. DO THEY WORK?

A. The U.S. Environmental Protection Agency has tested hundreds of these gizmos. Some have you add liquids or pills to the tank; others have you add an underhood magnet or a vortex generator in the air-intake system. So far the EPA has found none that delivers significant savings; some can even damage your engine. The only devices that stand a chance of improving your miles per gallon are those that modify not the car but your driving habits. Consider a real-time fuel-economy reader—such as the Kiwi (plxkiwi.com, $299)—which installs easily on your dash and includes lessons to help you accelerate less aggressively and otherwise drive in a way that reduces your mileage.

Q. HELP! I WANT TO GET RID OF MY SUV.

A. With thousands of dollars in rebates lying on the hoods of new SUVs, it’s hard to get a good price selling a used one. “You could get 45% on a three-year-old Toyota Sequoia two years ago, but now it’s worth 30%,” says Spinella. Before you sell, check the Is It Worth Trading in Your Gas Guzzler? calculator at Edmunds.com. Depending on the answer, you may want to sit on your ute at least until fall, when four-wheel-drive vehicles will be in greater demand and pump shock may have ebbed.

If you must sell, do it on your own rather than trade it in. Dealers don’t need another SUV collecting dust on their lot. So if they agree to take yours, they’ll pay you well under market. More than half of used-car buyers shop online, reports J.D. Power, so post your ad on sites like AutoTrader.com or Cars.com. To sell fast, advertise it for a few hundred less than the lowest listing.

Q. BUT NOW IS A GOOD TIME TO BUY AN SUV OR A CROSSOVER, RIGHT?

A. Yep, if sticker price is your primary concern. You might knock as much as 15% off the MSRP, says Spinella. Plus, you have your choice of sweet financing (like 0% for 72 months on a Chevy Suburban) or hefty rebates (an average of $5,097, according to Edmunds.com, and as much as $7,000 on a Hummer H3). Figure out which is the better bet by using the Cash Back vs. Low Interest calculator at Cars.com.

Q. WHAT KIND OF FINANCING CAN I EXPECT TODAY?

A. “Going through the dealer is usually the best move these days,” says Spinella. “Banks have to make money on their loans, but dealers don’t really rely on financing for income.” If you’re shopping now, you’ll hit model year-end clearances, so you should be able to get a rate of 0% to 2.9% on something the manufacturer is trying to get rid of (read: SUVs). Aim for 4.9% or less on anything else, says Caldwell.

Q. WHAT ABOUT THE NEW DIESEL?

A. Popular in Europe, diesel is 20% to 40% more efficient than gas. And now a diesel car won’t make your garage smell like a truck stop: The fuel itself contains far less sulfur than it once did. Plus, diesel cars today have more efficient engines, and most 2009s will pass the same emissions standards as gas vehicles. The compliant 2009 Volkswagen Jetta—which gets 41 mpg on the high-way—went on sale in August; Audi, Honda and Mercedes-Benz will follow with models in the next few months. But experts predict that the U.S. will be slow to adopt these vehicles: Diesel is sometimes pricier than gas here, reducing or even negating potential savings. (In August 2007 diesel cost about the same as gas; recently it was $4.71 when gas was $3.93.) In the Northeast and Midwest, where houses are heated with oil similar to diesel, the cost goes up in winter. Also, you’ll pay a minimum $1,000 premium on these cars. To see if diesel would make sense for you, use the side-by-side comparison tool at fueleconomy.gov, entering in local gas and diesel prices.

Q. I’VE HEARD ABOUT A NEW KIND OF HYBRID…

A. You are probably talking about plug-in hybrid electric vehicles, or PHEVs. Like pure electric cars, these can be recharged via a wall socket. Unlike pure electric cars, PHEVs also have a gas engine that starts as needed to either move the car or recharge the battery, so you won’t be stuck as you are when your cell phone dies.

The fuel economics of PHEVs exceed those of the current crop of hybrids. They can run up to 40 miles on battery alone, and the cost per mile can be about a tenth that of a gas-powered car.

Toyota is hoping to have its Prius PHEV to market by 2010, and GM plans to sell its Volt PHEV by then too. The big question will be cost; the battery is quite expensive so far. “We’re talking thousands of dollars,” says Kelley Blue Book’s Nerad. “The payback period could be very lengthy.” The popularity of PHEVs will depend to a large degree on how big a tax credit the government offers.
——————————
STYLE FOR MILES

These six not-too-thirsty hybrid alternatives prove that fuel economy needn’t mean a compromise in style or value.

THE ROADSTER

Pontiac Solstice

SELLS FOR $21,614

FUEL ECONOMY (CITY/HIGHWAY) 19 MPG/25 MPG

ENGINE 173-HP 2.4-LITER DOHC I4

TRANSMISSION 5-SPEED MANUAL

SEATS TWO

The Solstice (and sister Saturn Sky) combines light weight, high responsiveness and decent fuel economy. And it’s one of the lowest-priced convertibles in North America.

THE SPEEDSTER

Chevrolet Corvette Convertible

SELLS FOR $51,545

FUEL ECONOMY 16 MPG/26 MPG

ENGINE 430-HP 6.2-LITER OHV V-8

TRANSMISSION 6-SPEED MANUAL

SEATS TWO

This isn’t the car you buy for its fuel economy; it’s the car you buy for its sophisticated chassis, V-8 engine and ability to hustle around corners. But drop it into sixth gear on the highway and you get bragging rights for mileage too.

THE SMART FAMILY CAR

Saturn Vue XE

SELLS FOR $21,707

FUEL ECONOMY 19 MPG/26 MPG

ENGINE 169-HP 2.4-LITER DOHC I4

TRANSMISSION 4-SPEED AUTOMATIC

SEATS FIVE

If you must buy an SUV, this one won’t put you in hock to the Saudis. It gets decent mileage by any standard, but it’s especially good for an SUV. At $4,000 less than its hybrid twin, it’s a great value.

THE COOL CARRYALL

Scion xB

SELLS FOR $17,220

FUEL ECONOMY 22 MPG/28 MPG

ENGINE 158-HP 2.4-LITER DOHC I4

TRANSMISSION 5-SPEED AUTOMATIC

SEATS FIVE

This ugly-chic crossover likely has the highest ratio of interior volume to curb length of any vehicle. It’ll welcome five adults and a good amount of luggage, and it needs to stop for gas only every 400 miles.

THE STURDY SECOND CAR

VW Rabbit Coupe

SELLS FOR $17,325

FUEL ECONOMY 22 MPG/29 MPG

ENGINE 170-HP 2.5-LITER DOHC I5

TRANSMISSION 5-SPEED MANUAL

SEATS FIVE

The Rabbit, which was called the Golf for a while, has been rechristened as its ’70s self. It’s proof that compact can be comfortable—five passengers fit fine—yet it gets the mileage you’d hope for from a car half as much fun to drive.

THE URBAN HIPSTER

Vespa LX

SELLS FOR $3,199

FUEL ECONOMY 70 MPG TO 80 MPG

ENGINE 50CC SOHC 1-CYL

TRANSMISSION AUTOMATIC

SEATS TWO

It’ll go only 39 mph, but why hurry when you’re getting 80 miles per gallon? This Italian import is perfect for squeezing through city traffic—though not advised on the highway—and it’s a breeze to park. Consider it the ultimate commuter solution.
——————————

HOW FAST DOES A HYBRID PAY OFF?

So you’re thinking about bypassing a standard Camry in favor of a hybrid Prius (if you can find the darn thing). Wondering how long it’ll take before your savings at the pump compensate for the higher price? The answer depends on where gas prices go; see below. At today’s $3.93 a gallon, it’d take almost five years to recoup the $4,913 difference and start saving money. (By the way, that Prius has an MSRP of $23,535, but good luck getting it; we’ve noted what it’s actually selling for.) Now, if you got a hybrid on which there are still tax credits, the payback could be a few months shorter. Still, you’re paying a lot up front for delayed gratification, especially considering that a 2008 Camry and Prius are expected to retain virtually the same percentage of value on resale by 2013—39% and 38%, respectively—according to Kelley Blue Book.

Make your best guess as to where gas prices will go, then check the number right below it for how long before you break even. This assumes 15,000 miles of driving a year, mostly around town.

——————————
[This article contains a table. Please see hardcopy of magazine or PDF.]

SELLS FOR…

FUEL ECONOMY (CITY/HIGHWAY)

GAS CONSUMED IN A YEAR

ANNUAL GAS COST AT TODAY’S PRICES

TOYOTA PRIUS

$24,548

48 MPG/45 MPG

326 GALLONS

$1,281

TOYOTA CAMRY

$19,635

21 MPG/31 MPG

600 GALLONS

$2,358

IF GAS COSTS THIS MUCH PER GALLON…

$2

$3

$4

$5

$6

$7

$8

IT’LL TAKE THIS MANY YEARS TO BREAK EVEN.

9.0

6.0

4.5

3.6

3.0

2.6

1.7

NOTES: Based on 45% highway, 55% city driving; 15,000 annual miles. Models are 2008 Toyota Prius four-door hatchback and 2008 Toyota Camry four-door sedan with automatic transmission. Prices are transactional figures from Kelley Blue Book Kelley New Car Blue Book Value. SOURCES: Kelley Blue Book, Fueleconomy.gov, MONEY calculations.

As seen on the web at CNNMoney.com.

11 mileage-obsessed questions
It’s never been easy to buy a car, but with soaring gas prices, you may have a lot more to ask about what’s best for you. Here are the answers.

By Mike Allen, Money Magazine contributing writer
August 12 2008: 6:04 AM ET

1. Following convention

Question: How do I get a deal on a conventional car with decent fuel economy?

Answer: First consult fueleconomy.gov to narrow your list of potential cars based on mileage; then check Kelley Blue Book’s “New Car Blue Book Value,” the price these autos are really selling for now.

Stick with vehicles going for less than sticker, generally those in the 30-mpg-and-under range. Pick three and check them on CarsDirect, which allows you to select specific trim and options, then see an offer price from a local dealer.

Next e-mail Internet managers at up to eight local dealers, telling them about that quote and asking if they can beat it. (These people usually cut to the chase fast.) Go for a second round with your new low. Ideally you’ll end up under Blue Book Value.

2. Used value

Q. What about buying used?

A. It depends. “Used compact cars in really good shape – like three-year-old Honda Civics – are commanding 70% to 90% of their original MSRP because demand is so high,” says Joe Phillippi, president of AutoTrends Consulting.

Adds John Wolkonowicz, senior automotive analyst for Global Insight: “Buying a used Camry or Accord isn’t a great move – they hold value too well.”

Your best deal: a car that isn’t in great demand but gets good reliability ratings from J.D. Power & Associates, such as a 2005 Ford Focus (24 mpg city, 33 mpg highway) or Hyundai Elantra (25 mpg, 33 mpg).

Both sell for less than 60% of the manufacturer’s suggested retail price (MSRP), which seems an underestimation of their real value, considering their J.D. Power ratings.

3. Function over form

Q. Forget about style. I want the most fuel-efficient conventional car money can buy. Which one should I go for?

A. Don’t mind running errands in a glorified golf cart? The Smart ForTwo coupe ($12,235) gets 41 mpg on the highway, 31 in the city.

A roomier option: the Toyota Yaris ($13,110), which gets 36 mpg and 29 mpg.

4. Hybrid hustle

Q. I really want a hybrid. Any advice?

A. Dealers have waiting lists for the two most popular, the Prius and the Civic Hybrid. So if you want one of these, start with the largest dealer in your area, as it gets the most inventory. Be flexible about trim, color and options; you’re in no position to be picky.

Still, you’ll likely have to put your name on a waiting list; expect to pony up a refundable deposit of $1,000 or so. (As of now you’ll also pay about $1,000 above sticker on the Prius, according to Kelley Blue Book.) If the delivery time is longer than you’d like, look beyond your area.

“Hybrids are most popular in coastal states and Texas,” says Jack Nerad, an analyst at Kelley Blue Book and author of “The Complete Idiot’s Guide to Hybrid and Alternative Fuel Vehicles.” “Your best chance of finding one is in the Midwest.” (Of course, you’ll have to pay to get the car to you, which can add up to $1,000 to your bill.)

You’ll have an easier time getting a hybrid with less cachet and fewer miles per gallon, such as the Chevy Malibu (24 mpg city, 32 highway) or the Nissan Altima hybrid (35 mpg, 33 mpg).

5. Gizmo gambler

Q. I’ve seen gadgets that promise to improve my fuel economy. Do they work?

A. The U.S. Environmental Protection Agency has tested hundreds of these gizmos. Some have you add liquids or pills to the tank; others have you add an underhood magnet or a vortex generator in the air-intake system.

So far the EPA has found none that delivers significant savings; some can even damage your engine. The only devices that stand a chance of improving your miles per gallon are those that modify not the car but your driving habits.

Consider a real-time fuel-economy reader – such as the Kiwi ($299) – which installs easily on your dash and includes lessons to help you accelerate less aggressively and otherwise drive in a way that reduces your mileage.

6. Dump your gas guzzler…

Q. Help! I want to get rid of my SUV.

A. With thousands of dollars in rebates lying on the hoods of new SUVs, it’s hard to get a good price selling a used one. “You could get 45% on a three-year-old Toyota Sequoia two years ago, but now it’s worth 30%,” says Spinella.

Before you sell, check the “Is It Worth Trading in Your Gas Guzzler?” calculator at Edmunds.com. Depending on the answer, you may want to sit on your ute at least until fall, when four-wheel-drive vehicles will be in greater demand and pump shock may have ebbed.

If you must sell, do it on your own rather than trade it in. Dealers don’t need another SUV collecting dust on their lot. So if they agree to take yours, they’ll pay you well under market.

More than half of used-car buyers shop online, reports J.D. Power, so post your ad on sites like AutoTrader.com or Cars.com. To sell fast, advertise it for a few hundred less than the lowest listing.

7. …or buy a new one.

Q. But now is a good time to buy an SUV or a crossover, right?

A. Yep, if sticker price is your primary concern. You might knock as much as 15% off the MSRP, says Spinella.

Plus, you have your choice of sweet financing (like 0% for 72 months on a Chevy Suburban) or hefty rebates (an average of $5,097, according to Edmunds.com, and as much as $7,000 on a Hummer H3).

Figure out which is the better bet by using the “Cash Back vs. Low Interest” calculator at Cars.com.

8. Low low interest rates!

Q. What kind of financing can I expect today?

A. “Going through the dealer is usually the best move these days,” says Spinella. “Banks have to make money on their loans, but dealers don’t really rely on financing for income.”

If you’re shopping now, you’ll hit model year-end clearances, so you should be able to get a rate of 0% to 2.9% on something the manufacturer is trying to get rid of (read: SUVs). Aim for 4.9% or less on anything else, says Caldwell.

9. Diesel dilemma

Q. What about the new diesel?

A. Popular in Europe, diesel is 20% to 40% more efficient than gas. And now a diesel car won’t make your garage smell like a truck stop: The fuel itself contains far less sulfur than it once did. Plus, diesel cars today have more efficient engines, and most 2009s will pass the same emissions standards as gas vehicles.

The compliant 2009 Volkswagen Jetta diesel – which gets 41 mpg on the highway – went on sale in August; Audi, Honda and Mercedes-Benz will follow with models in the next few months.

But experts predict that the U .S. will be slow to adopt these vehicles: Diesel is sometimes pricier than gas here, reducing or even negating potential savings. (In August 2007 diesel cost about the same as gas; recently it was $4.71 when gas was $3.93.) In the Northeast and Midwest, where houses are heated with oil similar to diesel, the cost goes up in winter.

Also, you’ll pay a minimum $1,000 premium on these cars. To see if diesel would make sense for you, use the “Side-by-Side Comparison” tool at fueleconomy.gov, entering in local gas and diesel prices.

10. Plugging in

Q. What is this new kind of hybrid I’ve heard of?

A. You are probably talking about plug-in hybrid electric vehicles, or PHEVs. Like pure electric cars, these can be recharged via a wall socket. Unlike pure electric cars, PHEVs also have a gas engine that starts as needed to either move the car or recharge the battery, so you won’t be stuck as you are when your cell phone dies.

The fuel economics of PHEVs exceed those of the current crop of hybrids. They can run up to 40 miles on battery alone, and the cost per mile can be about a tenth that of a gas-powered car. Toyota is hoping to have its Prius PHEV to market by 2010, and GM plans to sell its Volt PHEV by then too.

The big question will be cost; the battery is quite expensive so far. “We’re talking thousands of dollars,” says Kelley Blue Book’s Nerad. “The payback period could be very lengthy.” The popularity of PHEVs will depend to a large degree on how big a tax credit the government offers.

11. Doing the math

Q. How fast does a hybrid pay off?

A. So you’re thinking about bypassing a standard Camry in favor of a Prius (if you can find the darn thing). Wondering how long it’ll take before your savings at the pump compensate for the higher price?

The answer depends on where gas prices go. At today’s $3.93 a gallon, it’d take almost five years to recoup the $4,913 difference and start saving money. (By the way, that Prius has an MSRP of $23,535, but good luck getting it; we’ve noted what it’s actually selling for.)

Now, if you got a hybrid on which there are still tax credits, the payback could be a few months shorter. Still, you’re paying a lot up front for delayed gratification, especially considering that a 2008 Camry and Prius are expected to retain virtually the same percentage of value on resale by 2013 – 39% and 38%, respectively – according to Kelley Blue Book.

- Additional reporting by O.C. Ugwu and Andrew Nusca

As seen in the August 2008 issue of Money magazine and on the web at CNNMoney.com.

Olathe, KS
Top 100 rank: 11
Population: 114,600

One of the fastest-growing cities in the nation, Olathe was reportedly named for the Shawnee word for “beautiful.”

Once a prairie of wildflowers, Olathe has outgrown its sleepy roots with tremendous development: this Kansas City suburb is home to Honeywell, ALDI, Garmin and Farmers Insurance Group.

It also hosts the championship games of the National Association of Intercollegiate Athletics. Outdoor recreation opportunities abound, including running, cycling, fishing, boating, and team sports. The area is also popular for hot-air ballooning and sailboarding, and it has two public lakes.

As seen in the August 2008 issue of Money magazine and on the web at CNNMoney.com.

Highlands Ranch, CO
Top 100 rank: 12
Population: 102,600

Just 12 miles southeast of Denver, Highlands Ranch is a young unincorporated community — only 27 years old this year. Settled by Native Americans long ago, it remained a series of farms and ranches until the 1980s brought suburban development.

The community is home to the Highlands Ranch Mansion, or “Castle Isabel,” a turn-of-the-century, 22,000-square foot structure built by a wealthy resident in 1904.

Though the area is still unincorporated – you might not find it on a map – community is strong here. All Highlands Ranch residents must follow a community covenant that has firm guidelines on housing modification, fencing, and contribution to the local library and recreation centers.

As seen in the August 2008 issue of Money magazine and on the web at CNNMoney.com.

Gilbert, AZ
Top 100 rank: 28
Population: 191,500

In the early 1900s, Gilbert was known as the Hay Capital of the World. Today it is a bustling small city and the fastest-growing town in Arizona in the last decade.

New development projects include the Freestone Recreation Center, a new regional mall called SanTan Village, and a planned Mormon temple.

Retaining the charm of the old days, the town’s Heritage District remains a quaint and historic heart of the community. And the schools are top notch.

As seen in the August 2008 issue of Money magazine and on the web at CNNMoney.com.

Chandler, AZ
Top 100 rank: 30
Population: 240,500

Feathered hats may not be the rage anymore, but Chandler’s annual Ostrich Festival certainly is: It’s the town’s nod to the ostrich farms that used to dot the area.

Today, technology has displaced feathers as big business here, with a major presence by computer chip maker Intel. And the second largest mall in the Phoenix area — the 180+ stores in the Chandler Fashion Center — is a shopper’s paradise.

On the downside, public transportation is weak: many local bus routes to Phoenix end a few miles outside of town.

As seen in the August 2008 issue of Money magazine and on the web at CNNMoney.com.

Bolingbrook, IL
Top 100 rank: 32
Population: 69,800

Not too many places near Chicago can go by “village” anymore, but Bolingbrook claims the title proudly.

It’s a relatively new suburb of Chicago, having been incorporated only in 1965. Since then, growth has exploded – so much so that IKEA brought its second Illinois location here three years ago.

An open-air mall, The Promenade Bolingbrook, also opened here last year. What’s more, Clow International Airport, owned by the village for public use, is slated for expansion.

As seen in the August 2008 issue of Money magazine and on the web at CNNMoney.com.

Loveland, CO
Top 100 rank: 33
Population: 61,100

In the late 1920s, Loveland’s Spring Glade orchard was the largest cherry orchard west of the Mississippi River, contributing to a million-dollar cash crop.

Now, thanks to its name, Loveland is better known as the home of the Valentine Re-Mailing Program. Half a million valentines are sent here, hand-stamped with a Valentine’s Day verse and forwarded to intended recipients.

Though big brother Fort Collins sits to the north, there’s plenty of action in Loveland: the city has a notable sculpture collection, and the Budweiser Event Center houses acts such as David Bowie and Disney on Ice.