Tag Archives: fuel economy

Lower Pump Prices Can Cause Foolish Vehicle Purchases


The price at the American gas pump is creeping back up, but it’s still at least a dollar a gallon below last year. That’s $15-20 a fillup of regular. Savings add up quickly. Still, over the course of a year of driving say, 15,000 miles it is not an enormous sum–depending on the vehicle being fueled. Let’s say it’s a (relatively) fuel-efficient car that gets 25 miles per gallon. That’s 600 gallons or $600 in savings. So what happens when the gasoline cost drops? People rush out to buy that pickup they really wanted but were avoiding when pump prices went up. So now they get 15 miles per gallon. That’s 1,000 gallons. So let’s say the price at the pump is now $2.50. With the pickup, the driver spends $2,500 on gas; with the car he or she spends $1,500. So instead of saving money, the driver spends $1,000 more! What happens when the fuel costs rise back up further, which we all know they will? That’s right, the driver is further behind.  How many years will the driver own the pickup? Well, if the gas cost goes WAY up, they will sell it sooner. But when they do, they will lose out there too, because of depreciation on the truck. Consumer psychology is a strange and marvelous thing, if you are a manufacturer or dealer; not so much if you are a reflexive buyer. Many people are now keeping vehicles for 8-10 years or even more. Buying and keeping more fuel efficient vehicles really makes a difference over that time span! Yes, there are reasons why you might need a pickup. Living in rural or semi-rural environment it may be essential. Ditto for hauling stuff. But no one really needs a high performance vehicle for street use.

Gas Prices–The Real Harm Is NOT Vacations

An odd sort of faulty economic impact analysis keeps leaving the lips of TV and radio talking heads. I suppose it is part and parcel of the often observed herd behavior of mainstream media’s first line reporters. High gasoline prices are keeping people home. Vacations will be shortened or limited to local travel. In the end, the stories seem to become self-fulfilling prophecies as Americans listen to the reports. But how much of a dollar impact to the average family  vacation is even a $2-3 more per gallon price? Continue reading Gas Prices–The Real Harm Is NOT Vacations