America's response to gas prices...

[Blue Order]

And Gas-Saver Makes Three (http://www.nytimes.com/2007/05/26/business/26small.html?em&ex=1180324800&en=a04b26d8bb211347&ei=5087%0A)

May 26, 2007
And Gas Saver Makes Three Cars in the Driveway
By MICHELINE MAYNARD

DETROIT, May 25 — With gas prices well over $3 a gallon nationwide, many drivers are lining up to buy small cars.

But hundreds of thousands of consumers aren’t giving up anything to downsize. Instead, they are simply adding pint-size transportation to their driveways, parked alongside their S.U.V. or pickup.

In households that own a small car, the family fleet is close to an average of three vehicles, according to CNW Marketing Research, which tracks industry trends (the national average is just over two cars per household; America was a one-car-per-family nation a generation ago).

These growing fleets suggest an approach to conservation that is more addition than subtraction.

“Small cars are like a fashion statement,” said Art Spinella, president of CNW Marketing.

For three small cars — the Toyota Prius and Corolla and the Honda Civic — more than 500,000 were sold last year as second or third cars in a household, CNW data shows.

Ken Collinsworth, 53, bought a Toyota Yaris last month for his daughter to take to college this fall. But with gas close to $4 a gallon near his home in Paso Robles, Calif., Mr. Collinsworth has been driving the Yaris instead of his BMW X5 sport utility and GMC Sierra pickup.

“I steal it from her every chance I get,” said Mr. Collinsworth, who added that he would like to get another Yaris when his daughter leaves for college.

In another era, he might be pitied for parking one of his luxury cars to drive around in an econobox.

But unlike small cars during the disco era, which had few creature comforts, the latest crop of small cars — including the Yaris, Honda Fit and Nissan Versa — can be purchased with many of the same sought-after options as their bigger kin, like navigation screens or iPod connections.

“It is a fundamental change,” Mr. Spinella said. “People are willing to buy small cars because they are more sophisticated.”

And buyers appear willing to pay a lot for them. In 1990, buyers stuck to the low end of the scale when they bought a small car, CNW’s data shows. More than three-quarters opted for basic no-frills models, sometimes even forgoing a radio to keep the price down.

Now, 90 percent of buyers are buying fully loaded small cars, according to the data.

“You look at these cars, and they have 16-inch wheels and a leather-wrapped steering wheel and a high-quality interior,” said A. Andrew Shapiro, a partner in the Casesa Shapiro Group, an auto industry investment and advisory firm.

“They aren’t econoboxes, they’re just smaller cars,” Mr. Shapiro added.

To be sure, many owners are downsizing from bigger vehicles, and rising gas prices are the primary reason.

But others are adding vehicles, also to save on gas (if not the cost of the additional car).

Pierre Tremblay, 67, of Howell, Mich., bought a Toyota Prius this month because driving his Dodge Ram pickup 40 miles round-trip to work was costing so much. So far the Prius is getting 55 miles per gallon, compared with 13 for the truck.

“I can go to work now, back and forth, on less than a gallon,” said Mr. Tremblay, a maintenance manager for a cement company. “Before it was at least three.”

With regular unleaded gas averaging $3.53 a gallon in Michigan this week, according to AAA, that is a savings of over $8 every workday.

But Mr. Tremblay was not ready to get rid of his pickup, which he uses to haul a camping trailer.

Americans have spent $20 billion more on gasoline so far this year compared with 2006, according to a recent report by the Government Accountability Office. That works out to about $146 a person, a fraction of what a new car costs.

“From a dollars-and-cents point of view, it doesn’t make sense,” said Jesse Toprak, director of industry analysis for Edmunds.com, a Web site that offers car-buying advice. “There’s no way you’re going to drive it enough to justify the purchase, so it’s more of a psychological decision.”

That is particularly true for premium models, like the Mini Cooper, as well as cars in Toyota’s Scion lineup. When decked out with options like aluminum wheel covers and leather seats, their prices can climb well above $20,000, the same as a family sedan or a midsize S.U.V.

Even another Yaris would cost Mr. Collinsworth about $13,000 — if he could meet the conditions set down by his wife to buy one. He said that when he broached the subject recently, she replied: “Sell your truck and you can buy one.”

Nick Bunkley contributed reporting from Canton, Mich.

[jjvw]

So, you can save gas and aquire another car payment at the same time? Brilliant!

[ericy]

So, you can save gas and aquire another car payment at the same time? Brilliant!

It could be one of those cases where the truck is old and paid for, so the costs of holding onto it would mainly be insurance and gas for those times that he needs the truck.

[jjvw]

Possibly...

"Ken Collinsworth, 53, bought a Toyota Yaris last month for his daughter to take to college this fall. But with gas close to $4 a gallon near his home in Paso Robles, Calif., Mr. Collinsworth has been driving the Yaris instead of his BMW X5 sport utility and GMC Sierra pickup.

“I steal it from her every chance I get,” said Mr. Collinsworth, who added that he would like to get another Yaris when his daughter leaves for college."

[caloso]

Heck, for $13,000 I can get a couple new Cervelo Soloist Carbons.

[Az B]

I just stopped driving as much as possible. It's far cheaper than buying a new car that gets good mileage. I like my van, and it gets 22-24mpg which isn't bad. But the easiest and cheapest way for me to beat high gas prices is to leave it in the driveway as much as possible.

Buying a new car to save money seems kinda idiotic. But I guess that's the knee jerk response of a nation addicted to thier cars.

Az

[kf5nd]

They won't be able to retire, but they'll have nice cars... until they get repo'd, that is.

[gerv]

I just stopped driving as much as possible. It's far cheaper than buying a new car that gets good mileage.
Az, this would be common sense. Pity there's so little of it when it comes to vehicles. If you really think the vehicle works for you, your plan to drive less is the best approach... When it comes to conservation, you can probably do a lot more for the environment and your wallet by being "conservative".

[pj7]

I saw on the AAA website that we in Michigan have the highest gas prices in the U.S. now, though I haven't noticed; the price of a jar of peanutbutter hasn't changed in quite some time. ;)

[pedex]

energy is one of the strongest inelastic commodities, I expect people to pony up and buy gas till its more than 20-30 times its current price

with most people's fuel budgets being so small relative to other things, its gonna get alot more expensive till people cut back

[eofelis]

Az, this would be common sense. Pity there's so little of it when it comes to vehicles. If you really think the vehicle works for you, your plan to drive less is the best approach... When it comes to conservation, you can probably do a lot more for the environment and your wallet by being "conservative".

+1

My Subaru has been sitting in the driveway a lot more lately, while my bike has been getting ridden a lot more.

[HoustonB]

energy is one of the strongest inelastic commodities, I expect people to pony up and buy gas till its more than 20-30 times its current price

with most people's fuel budgets being so small relative to other things, its gonna get alot more expensive till people cut back
Interesting. Lets say the average car (not SUV) has a 12 gallon tank. At $3 a gallon and say 1 refill a week that is $36 a week. With gasoline actually over $3 a gallon, the reality is that the average weekly car (not SUV) gasoline expenditure is probably over $40.

10 times $40 is $400 - do you yourself or anybody you know have $1,700 monthly of disposable income handy? Maybe you guess that everybody has monster expenditure of $1,700 that will be easy to redirect to gasoline. Oh I'm sorry it's not $1,700 because that is only 10 times current price. We should really be talking about 20 - 30! LOL

Seriously, you cannot possibly deny that very few people have large amounts of disposable income that can absorb a price increase of even 2 to 3 times the current price of $3.30. There is no room in the average budget for massive increases in the price of gas. Personal debt levels are already at all-time record levels - just what is it that people will sacrifice to pay for the gasoline, is it gym membership?

[wahoonc]

HoustonB,
Point well made.
I guess I am the exception to the rule...I have minimal personal debt and could absorb a 10 fold increase in fuel prices. BUT I WON'T! The wife and I live on a budget and live well under our means. We have already had discussions about what our potential plans are if fuel continues to escalate (which I think it will) as well as the various possibilities when the US economy tanks. We are fully prepared to scale back our lifestyle more if necessary and become even more self sufficient. I realize we are in a minority but live much more relaxed because of it. The last few years for us have been what I call a "cash grab" in that we have been banking as much of our salaries as possible to hedge for the future. Not to gloat, but just to point out that it is possible we banked my wife's entire salary last year as well as about 30% of mine. We are not by any means wealthy, our combined income just does tip into the six figure range. But we live on old family land in a house that is fully paid for. All vehicles we own are fully paid for and we pay cash for our needs. Wants are kept to a minimum. We don't live like peasants or serfs and enjoy the occasional night out on the town for a concert or movie (which I think is a great waste of money, but if momma ain't happy, nobody's happy;) )
Our single most expensive budget item right now is fuel. However mine is almost fully reimbursed by my employer. If that ever stops I will quit working for them.

Aaron:)

[maddyfish]

No surprise here, just like refrigerators, they are twice as effecient now ass they were 40 years ago, but 3 times bigger. All high mileage cars do is allow people to drive alot more.

[wrafl]

I don't need another car and will get rid of the car someday but I sure need the essentials biking in comfort instead of dropping another $13K for a fuel efficient car. For that amount of money, perhaps I can get another bicycle, electric powered for daily commute provided the office is within the charged range of the battery. A trailer to haul groceries and other things from the home center. It's one way to be car free and independent of petroleum use I think.

[pedex]

inelastic commodity, basic business 101-------people will pay, and they will pay dearly, and usually well past the point of any common sense or reason

$60 per gallon would be cheap, but probably closer to what its really worth in today's money though

[Dahon.Steve]

[url=http://www.nytimes.com/2007/05/26/business/26small.html?em&ex=1180324800&en=a04b26d8bb211347&ei=5087%0A]

“From a dollars-and-cents point of view, it doesn’t make sense,” said Jesse Toprak, director of industry analysis for Edmunds.com, a Web site that offers car-buying advice. “There’s no way you’re going to drive it enough to justify the purchase, so it’s more of a psychological decision.”


What makes a person take out a car loan, spend several thousand dollars a year in added costs to avoid paying higher gas prices on the larger vehicle??

Regardless, we are seeing people holding onto the dream of driving a huge vehicle when the know they can't afford it. If you can't afford the increase in gas prices you shouldn't even think of buying a new car. The days of owning a large motorcar are comming to an end because the days of inexpenisve fuel are coming to an end.

[Dahon.Steve]

The last few years for us have been what I call a "cash grab" in that we have been banking as much of our salaries as possible to hedge for the future. Not to gloat, but just to point out that it is possible we banked my wife's entire salary last year as well as about 30% of mine.


Good idea. Should war break out with Iran, we can really see gas prices go sky high. The price of fuel could very well send the nation into a deep recession and there will be no Dot.com boom to save us. Even the federal reserve can't save us with low interest rates which spurred the real estate buying craze which kept us from going into a deep recession. Now that every one and his mother has a home, the whole thing looks like it's starting to crash so the recession is not very far off.

[freediver]

Then there's the oil companies idea for their employee's to bike to work: http://www.chron.com/disp/story.mpl/headline/biz/4838135.html

Jon

[Platy]

Then there's the oil companies idea for their employee's to bike to work: http://www.chron.com/disp/story.mpl/headline/biz/4838135.html


Kudos to Exxon, BP and Conoco for supporting transportational cycling.

Looking forward to an Exxon Bikeway through every town. Give us an inch & we'll take a mile.

[Dahon.Steve]

It's a good story but I think Exxon is doing this because of all the complaining going on inside the corporate offices about the high price of fuel. If gas continues to go up, their best employees will want larger pay increases or leave to a job that offers more compensation.

[wahoonc]

Then there's the oil companies idea for their employee's to bike to work: http://www.chron.com/disp/story.mpl/headline/biz/4838135.html

Jon

Interesting but I would have to wonder what is behind it...other than the obvious health benefits for the employees and the reduced costs to the companies. I bet they will try and make advertising fodder out of it is pretty short order:D

Aaron:)

[rickyaustin]

Interesting. Lets say the average car (not SUV) has a 12 gallon tank. At $3 a gallon and say 1 refill a week that is $36 a week. With gasoline actually over $3 a gallon, the reality is that the average weekly car (not SUV) gasoline expenditure is probably over $40.

10 times $40 is $400 - do you yourself or anybody you know have $1,700 monthly of disposable income handy? Maybe you guess that everybody has monster expenditure of $1,700 that will be easy to redirect to gasoline. Oh I'm sorry it's not $1,700 because that is only 10 times current price. We should really be talking about 20 - 30! LOL

Seriously, you cannot possibly deny that very few people have large amounts of disposable income that can absorb a price increase of even 2 to 3 times the current price of $3.30. There is no room in the average budget for massive increases in the price of gas. Personal debt levels are already at all-time record levels - just what is it that people will sacrifice to pay for the gasoline, is it gym membership?


I think that you both may be correct.

People (most middle/lower class, most of the population) don't have the money for a substantial increase in gas. They will however keep buying it and probably cut their driving very little if at all.

I think they will cost their costs in other ways, give up other luxuries before the cars. Max out credit cards... etc. They will buy $15,000 cars to save $800 a year on gas. Credit cards will eventually get maxed out... you get the jist. Spend money they don't have - the American way! (I'm guilty of this now, but it's hard not to be guilty while in college with tuition and such)

The mix of rising energy costs and a housing bubble that could burst at any moment is going to make suburbia very interesting in the next 5-10 years.

[The Historian]

And Gas-Saver Makes Three (http://www.nytimes.com/2007/05/26/business/26small.html?em&ex=1180324800&en=a04b26d8bb211347&ei=5087%0A)

May 26, 2007
And Gas Saver Makes Three Cars in the Driveway
By MICHELINE MAYNARD

Snipped article.


Self-delusional greenwashing.

[derath]

do you yourself or anybody you know have $1,700 monthly of disposable income handy?

I do. I am also not car free, or car-lite. My job pretty much assures I will never be car free (someone has to do the jobs that require travel).

But then again I don't carry car payments or drive gas guzzling vehicles.

But i find it funny in this forums how you all react to this article. So what if people are buying another car. Maybe their others are paid for. Most people are having severe difficulty dumping those big SUV's. Personally I'd rather those people keep their gas guzzlers parked in their driveway rusting away, than selling them off to someone else.

-D

[dynodonn]

Most people are having severe difficulty dumping those big SUV's. Personally I'd rather those people keep their gas guzzlers parked in their driveway rusting away, than selling them off to someone else.

-D

A familiar scenario at my household with the SUV parked outside sitting for weeks or months at a time. Of course, I was chastised on this forum for letting it sit,wasting a ready made resource, and causing another person to buy a new SUV or vehicle.

[bhtooefr]

Myself, it's not the fuel prices that are sinking me, it's the insurance. However, let's say fuel prices double. It'll then cost $80 to fill with ~14 gallons of diesel, instead of $40. That'll get me about 550 miles right now, probably 700 miles after I can afford to replace the transmission (so that I can have a 5th gear again.)

There'll definitely be a breaking point around there. But the only things within bicycling range of where I am are grocery stores and gas stations. Otherwise, I'd be doing at least a metric century a day in commuting, just to get to a lousy job, and a century for a good one.

So, I'd be forced to start driving off. Actually, I think this is the point where anarchy sets in, and drive-offs become common practice among the poor.

[jeff-o]

So, I'd be forced to start driving off. Actually, I think this is the point where anarchy sets in, and drive-offs become common practice among the poor.

Gas stations will just counter this by forcing you to hand over your credit card before the gas starts to flow. I've already seen it at some stations, in fact.

[bhtooefr]

Then you'll see hijackings for fuel, more credit card fraud, etc., etc., as people keep doing what the car culture has forced them to do to survive.

[ericy]

Then you'll see hijackings for fuel, more credit card fraud, etc., etc., as people keep doing what the car culture has forced them to do to survive.

I am guessing that late-night siphoning will increase. Last year there was a story about folks who punch holes in the bottom of the fuel tank and drain the thing that way - thereby defeating the locking gas caps and anti-siphon things in the filler neck.

It will be the big SUVs that will get picked on first - a little car won't have as much gas.

[KrisPistofferson]

Sales of motor scooters are apparently through the roof. I just got a Genuine Buddy 125, (a re-branded PGO from Taiwan,) and they're having problems filling the demand for parts in some areas because the demand has exceeded the supply. 90 MPG. :) Also, there's like 5 new scooter stores in my area that weren't around 6 months ago.

[Nycycle]

I got 650 miles to go on my new bike with my new helmet and my new gloves and my new Pearl Izumi's with after market tires will all be PAID for figuring gas @ $3.00 in my GMC.

It's $3.20 now and I want another bike, now if the gas hits $5.00 I might be able to talk the wife into it. I could force it but it's better to do it with her approval.

[Lamplight]

Interesting. My response to higher gas prices was to get a Wald giant delivery basket so I could finally get groceries on my bike, thus making my truck completely useless to me. :p

[squegeeboo]

Easy 2 step process to getting rid of gas costs:

1. Put car into tree*
2. Repeat as you aquire new cars.

*Wear your seatbelt.

[cerewa]

Then you'll see hijackings for fuel, more credit card fraud, etc., etc., as people keep doing what the car culture has forced them to do to survive.

It'll happen, yeah, but more people will choose the legal route to avoid paying too much for gas (use less: carpool, take the bus, ride a bike) than the criminal route.

[folder fanatic]

Myself, it's not the fuel prices that are sinking me, it's the insurance. However, let's say fuel prices double. It'll then cost $80 to fill with ~14 gallons of diesel, instead of $40. That'll get me about 550 miles right now, probably 700 miles after I can afford to replace the transmission (so that I can have a 5th gear again.)

There'll definitely be a breaking point around there. But the only things within bicycling range of where I am are grocery stores and gas stations. Otherwise, I'd be doing at least a metric century a day in commuting, just to get to a lousy job, and a century for a good one.

So, I'd be forced to start driving off. Actually, I think this is the point where anarchy sets in, and drive-offs become common practice among the poor.

I think you are confusing anarchy with a rather obvious withdrawl from car addtion that is/will occur-ing as each person/family group cannot afford to fuel-up. The poor will always be with us, scratching out a meager living. The middle class are/will be the ones that are hurting, quietly hidden in suburbia/exburbia. The rich, well they don't care one way or another. They will always have whatever they want.