Updated on 08.26.14

Gas Price Deflation

Trent Hamm

Should It Affect What Automobiles We Purchase?

Attack of the Giant Chicken by The Jamoker on Flickr!In just a few short months, the price of gas at the station I regularly use has dropped from $4.09 per gallon to $1.49 per gallon – an absolutely amazing drop. Not long ago, I spent $82 filling up my truck (which has a 20 gallon tank) – just today, I filled the tank for under $30.

From a strict personal finance perspective (and ignoring the larger global economic concerns), this is fantastic news for most people. If you have to fill a typical car tank each week (12 gallons), the price change is saving you somewhere on the order of $30 a week – that’s $120 a month, an amount that can really help with debt repayment, saving for a down payment, or preparing for retirement.

This shift in gas prices comes at an interesting time for me and my family. My wife and I have been carefully studying potential automobile purchases, and our calculations had led us to focus on automobiles that are efficient with their fuel. Using our numbers, assuming a $4-$5 gallon of gas going forward, fuel efficiency was so valuable that it often trumped a higher price at the dealership.

However, when we look at the era of $1.50 a gallon for gas, the math no longer holds true, and we’re typically looking at a better deal for a less fuel efficient car.

Here are some of our conclusions after talking over the situation and doing some additional research.

The price of gas will go up from here.

If oil prices stay as low as they are, oil producing countries will have to cut production to drive the price up. Most nations and regions that rely on oil income have already budgeted and planned for oil prices that are significantly higher than they are right now, and if the market doesn’t automatically bring those prices back up, they’ll do what they can to bring them up.

… but it’s impossible to know how much it will go up, or how fast.

No one can accurately predict the future, particularly when it comes to the future price of such a vital commodity with so many different fingers in the pool manipulating things. Perhaps there will be another speculative bubble. Perhaps the oil producing nations will begin to really tinker with production, driving prices up quickly. Perhaps the price will just slowly inch upwards over time. No one knows for sure, and there’s no way to make accurate bets on such moves.

That leaves gas mileage as an important but hard-to-estimate factor in determining the best car price.

It’s obvious that greater fuel efficiency will save money over time – the only question is exactly how much it will save. What we can rely on is this: fuel efficiency is a much bigger factor if you intend to own the car for a longer period of time. My wife and I, for example, prefer to buy automobiles that are late model used when we purchase them, but drive them until they are experiencing severe repair issues. Thus, for us, fuel efficiency is a bigger factor than it would be for a person seeking to pick up a car for just a few years.

Buying a more efficient car results in lower fuel costs regardless of prices, meaning your monthly upkeep cost is lower.

If you do choose to invest in a more fuel efficient car, it will save you money each and every month. Given the fact that we cannot know what the future holds, if you can make a choice now to reduce your required costs in the future, you’re generally well-advised to do so.

So, the best strategy is still acquiring a fuel-efficient car for the lowest price possible.

While it’s not worthwhile to pay a large premium for fuel efficiency, you’re still well-served seeking out highly fuel-efficient options regardless of the market conditions of the moment.

The same strategies apply whether gas is high or low.

Start saving now.

You’re always in a better position if you have the money in the bank to buy the car instead of having to take out a loan to buy it. Start saving right away – set up an automatic savings plan to take $100 a month from your checking and put it into a savings account designated for automobile savings.

Do your own research.

Know what you want in advance, and remember that fuel efficiency is definitely a positive even when gas prices are low.

Shop around.

That means don’t just jump in with the first dealership you visit. Instead, seek the best prices around. Stop in at several dealerships and use online tools as well.


That sticker price is just a starting point. Don’t be afraid to make a lower offer on the car once you’ve found the one you want.

What will we do?

Since we’re still in the “research” phase of the purchase – and also because we’re somewhat waiting for one of our vehicles to finally give out on us – we’re still sitting back and waiting. However, fuel efficiency remains one of our big considerations in the purchase, regardless of where gas prices are or where they might go.

Loading Disqus Comments ...
Loading Facebook Comments ...
  1. Matt says:

    ~$2.50 per gallon is the U.S.’s position on cost of fuel. Give or take, of course. If that helps your your estimating of monthly costs in the long-run.

  2. Matt says:

    ~$2.50 per gallon is the U.S.’s position on cost of fuel. Give or take, of course. Hope that helps your estimating of monthly costs over the long-run.

  3. Trent, what you’re hinting at is some estimate of the total cost of ownership of the vehicle and its relationship to purchase price.

    I made the decision a couple of years ago to purchase diesel VW with a manual transmission. That was a big decision for me because a) it was the most expensive car I have ever bought and b) I didn’t know how to drive a stick at the time! The cost of the car was about $3,000 more than a similarly equipped gasoline engine car.

    What makes it worthwhile is the total cost of ownership. It gets fabulous gas mileage (45-50mpg on the highway). The engine should last at least 300,000 miles without major repairs. The transmission is nearly bullet-proof. Other repairs are roughly in line with other cars.

    Even with diesel costing more than gas at the moment, it was a great purchase. When buying a car, you have to consider *everything* not just the purchase price.

  4. Brandon says:

    Maria makes a good point. It does sound like a TCO issue. I usually do my calculations at $3 – $4/gallon. The returns dwindle as the mileage goes up (the cost difference in 20mpg to 25mpg is not the same as 25mpg to 30mpg). The quality of the vehicle is at least as important as the mileage, although I wouldn’t buy a vehicle that would last forever if it only got 10mpg!

  5. jb says:

    To be honest, I would *not* pay (much) extra for better fuel mileage. Considering that 30-35mph cars can often be found at the low end of the market, there is little reason to. I bought a car in March, when gas was in the $3-$3.50/gallon range here, and figured out at the time that even at the $4/gallon range it would take a long time (8 yrs) get my investment back for buying a hybrid. (And if I get into a bad car accident before that point, I’m screwed.) So, I bought a 2007 Ion for just under $10k, which gets roughly 32mph.

    Of course, its worth seeing if hybrid prices have dropped during the gas price downturn. But I doubt they have dropped significantly.

  6. cv says:

    I think that for some people, the more fuel efficient option is better based on other values in addition to what you mention here. We can’t know if a more expensive fuel-efficient car will be worth it financially in the long run, but we do know that it’s better for the environment and helps reduce dependence on fossil fuels, and foreign oil in particular. It’s also more convenient to drive a car that needs to be filled up less frequently, especially if you do a lot of driving.

  7. doctor S says:

    The price of gas will infulence what type of vehicle people choose even though it should not. People should look to get cars that suit their needs. If you need a heavy duty truck, then get the truck, if you need to travel alot then get the gas mileage-friendly car. All people should look into green-er friendly cars, but that is a utopia right? We can’t convince everyone.

  8. Ian says:

    I hope that the scare made people realize that they shouldn’t change the ideas of fuel efficiencies, and plan ahead.

  9. Ryan says:

    I think the recent drop in prices is a bad thing (though I do enjoy it). People will inevitably start to buy more efficient cars again, and these same people will complain the loudest when prices go back up.

    Me? I’m happy with my 2006 civic coupe that can get ~39 mpg highway and low – mid 30’s for around town.

    When that dies I’ll get another, or possibly a hybrid if it makes financial sense.

  10. teri says:

    If only money were the only (or even most important) factor in considering many of our decisions, things would actually be much simpler. Alas, the cost you see is only the tip of the iceberg. What about the costs to the environment? What about the costs we see in the various taxes that need to happen to clean up/repair/restore/etc our air, water, and infrastructure? What about costs to society from larger-than-necessary vehicles that take up more space on roadways, in garages and parking lots, and on streetside parking? What about the cost to your children’s values when they see that you’ve made a choice solely on what’s good for YOUR pocketbook, not what’s good for the greater global community? What about the cost to your integrity, knowing you could have bought a higher quality, lower-impact product, but didn’t because it cost a little more? What about the cost to the overall market because we’ve continued to support the cheapest rather than the most sustainable options?

    This is the same as discussions about buying organic food, local food, or from local companies. The hidden costs are often dramatic, and we won’t see those until further down the line. A fuel efficient car (not necessarily a hybrid–there are very efficient non-hybrid cars), well-maintained and well-driven for maximum efficiency and life, should not be an option we who have to drive “consider”–it should be the baseline for what we’ll settle for. Our planet, our global neighbors, and our children deserve better than the cost we saddle them with otherwise.

  11. Brandon says:

    I haven’t noticed the price of vehicles with V8’s going back up since fuel prices dropped. I don’t know why anyone needs a V8 in a 4door vehicle, but now’s a great time to buy one.

  12. Misty says:

    We are also in the market for a new car in the future and we have decided that we would purchase a gas efficient/minimal emissions car at least, but probably a hybrid. My husband and I believe that helping the enviroment and doing what we can to reduce our carbon footprint is worth the extra time/cost that sometimes occur. While sometimes we pay a little bit more (for a car) it is something that we value to be worth it for the gas savings, the enviroment and setting an example for our son
    (similar to Trent buying healthy organic food for his family)

  13. I bought a 4 cyl Honda Accord earlier this year at well under sticker price. I negotiated everything online after test driving the car. I’m happy to help anyone here negotiate for a car as well. It’s easy. Below is a link to my experience and what I paid. You can find my email at the bottom of the post.


    Oh, and I drive like a grandpa and get 31 mpg in mixed driving.

  14. It’s pretty safe to assume that both diesel and gas prices will go up in the future (with a couple of fluctuations in the middle, as we’re going through now). So, purchasing a fuel efficient vehicle is a no brainer (just look at R&D at the major car companies to see what’s on the horizon – we will hopefully NOT be able to buy a fuel efficient vehicle in the US in about 30 years).

    Cost of vehicle ownership is vital and this is where many of the Asian brands do well (think Toyota and Honda) in terms of fuel, maintenance, repair cost (parts), etc.

    When researching a car it’s key to buy what you need and be practical, you almost need to have the “car as an appliance” hat on (don’t be influenced by emotion, design, or what your neighbor is driving).

    Also, look at dealer invoice and use it as a start of negotiation. Finally, do your homework and research before heading to the dealership, you should really only go to the dealership to do business (appear firm and know what you want in terms of price, options, etc.).

    http://www.scordo.com/blog/blog – a practical living blog

  15. morrison says:

    Here’s a scenario: what about those people who sold their gas guzzlers (at a loss) for a more, smaller, fuel efficient car (at a larger expense)? Now that gas is down to $1.59, would it had been worth it to hold onto the SUV rather than trade it in?

  16. Aryn says:

    I’m in the same situation, except that I will definitely be buying a car next year, hopefully in the first half of the year. Even though gas prices have fallen, I’m still looking for a car in the 30-35 MPG highway range. I don’t expect gas prices to stay low forever – it’s not like China and India will stop growing. I do see a silver lining, though, with gas prices currently low and car dealers desperate, I may be able to negotiate a much better deal on a car that had a fuel-efficiency premium just a few months ago.

  17. Brandon says:

    Are hybrids really better for the environment? They might have better MPG’s than a Hummer, but the energy costs to manufacture them, and the chemicals associated with their batteries might actually be WORSE for the planet than a gas-guzzler

  18. The question is whether the average consumer will be able to get the credit to buy an expensive SUV. Few can afford to buy a vehicle with no credit. With banks cutting back in consumer credit, will buyers be able to get the necessary credit to buy a large SUV? Also, given the financial troubles facing the North American auto makers, will they be in a position to offer buyers 0% financing to sell new vehicles? I have the feeling that the availability (or lack thereof) of credit will be the deciding factor as opposed to the price of gas.

  19. Tea says:

    I was at my local car repair shop a while ago (before the biggest drops in the gas price) and they pointed out that the cost of repairs is higher for hybrids. This is a store that loves hybrid cars and always encouraged their customers to buy green, but they advised people that buying a hybrid would not save them much money in the long run due to the increased repair cost. Now that gas prices are down, hybrids are even less attractive financially.

  20. KC says:

    It absolutely should not influence your decision to purchase a more fuel efficient car! If you don’t believe me read Hot, Flat, and Crowded (its a fantastic book anyway so you should read it whether you are a “greenie” or not – it’s a pro-America book). But after reading Friedman’s book I regret not buying a hybrid in May of 07 when my husband’s Civic was totaled.

    We looked at all the numbers and figured we couldn’t afford the premium you pay to buy and maintain a hybrid Camry. So we bought a gas Camry. Now I feel unpatriotic for doing so. It isn’t about the money. It’s about keeping money in the US. And by continuing to indulge our thirst for oil we are building up the treasuries of the SAudis, Russians, Turks, and other governments that don’t like us. I’d rather keep the money in my own country and the best way to do that is to greatly reduce the amount of oil I use.

  21. Michelle says:

    You know, it depends too on what your definition of “fuel efficient” is. We went from a one car family, a 2003 Hyundai Accent that got 30-35 mpg to a two car family when we bought our 2005 Ford Freestyle which gets 20. That was hard for us, to start paying more for gas, but we needed a family car. But some of our friends who have larger cars tell us what a great deal we’re getting on the mpg!! It’s just interesting how your own personal definition of “good” fuel economy factors in.

    And just a side note, I dare anyone to find a family car (6 or more seats) that gets better than about 21-22, we looked and couldn’t find one.

  22. Sayjack says:

    Your explanation of why and how “oil producing countries will have to cut production to drive the price up,” was overly simplified. Sure, the cost of gas will eventually go back up but it may or may not happen in such a strait forward manner as cutting production. See, the oil producing countries have a vested interest in our economic recovery and ongoing prosperity and if they drive the cost of oil back up too fast then they are ultimately hurting themselves.

  23. Lurker Carl says:

    I think the price of crude oil is going to bounce around the bottom like the stock markets. OPEC members spent their tremendous oil profits like drunken sailors. Now they are seriously hurting for money to subsidize the bloated infrastructures they’ve created. Those populations are now accustomed to the good life. OPEC literally can’t afford to cut production, their diminished oil profits won’t allow it.

    Regardless of the gasoline prices, still strive to buy a vehicle that is economical to own and operate yet fits your lifestyle with comfort and safety. You’ll have to live with it for many years to come, choose wisely. Most growing families need a vehicle larger than a Honda Insight or Toyota Echo.

    Anyone with excellent credit can still borrow money. The 30%-50% decrease in automobile sales is do to the 40% of folks who previously purchased new cars but couldn’t really afford one. It’s a buyer’s market if you’ve been frugal.

  24. Dan says:

    I would definitely buy the fuel efficient model for the only reason that the current fire sale on gas only means one thing. Whoever sets the price believes in the near future most won’t be able to pay the huge price and the gas inventory has to move so the price is lowered, just like the merchindise at the local stores. I’m more worried of that than rejoicing of lower prices.

    The price will go back up whenever its felt people can pay it. We’re still paying about $3.00 a gallon in Canada and we have the second largest reserve of oil in the world. people in the United States have it better!

  25. Drew54 says:

    @ KC

    You could also buy an American car.

  26. Randy Conley says:

    The possibility of another oil embargo or terrorist action should be considered. If we again find ourselves in long gas lines waiting to fill our vehicles (if the station doesn’t run out before we make it to the pump) , it becomes an issue of whether we can get to work or not, rather than how much we are spending on fuel each month.

  27. Steph says:

    I was thinking about this subject just the other day, but not in personal terms like you’ve stated but in more national terms. Especially here in Southern California, lots of people abandoned their big cars for hybrids and the like, but I wonder if we will quickly see a regression to SUVs or if people are still scarred by $4 gas.

  28. Trent, I do not think you can go wrong with an eye on fuel-efficiency. Oil is not going to stay this low. Global demand is going to skyrocket and OPEC considers it its birthright to price a barrel between $75-$100. Even though I drive a truck, I have always looked at fuel-efficiency and have owned several Nissan Frontiers.

  29. Chris @ BuildMyBudget says:

    It’ll be interesting to see if a shift takes place back towards larger trucks and SUV’s which have been cheaper as of late. I hope that people don’t fall for this temporary reduction of gas prices because prices will most certainly rise again.

  30. almost there says:


    What is an American car? My 2004 Saturn Vue has a honda engine and transmission but was built in the USA. The new Vues are built in Mexico after they shut down the plant in TN. My Honda is built in America by U.S. workers.

  31. Joey says:

    @ almost there

    That’s way too complicated. Some folks just want to think, FORD = AMERICA, TOYOTA = NOTAMERICA. It’s not very different from people who thought “Support the troops” meant slapping on a bumper sticker instead of trying to keep them from occupying countries sitting on oil.

  32. steve says:

    I am surprised that no one has mentioned the environmental impact of our vehicle choice and use so far. While financial considerations are very important, they are probably secondary in importance to our moral and ethical need to reduce our CO2 emissions as much as possible over the next 5 years and into the future. To me, regarding cars that means a) driving less or only when necessary and b) buying the most fuel efficient vehicle that is financially practical for my situation and c) centering my life as much as possible on my local area (within several miles) as opposed to spreading it out across miles and miles just because I have the technical capability to easily travel.

    As it is, I’m keeping my existing car which gets 30 MPG, but I am down to one tank of gas per month, sometimes less, due to both circumstances and choices I have made. When and if I am in the market for another car I will be looking to balance practicality and financial matters with environmental impact. Actually, I think I am making more impact by carpooling, riding my bike for the under 5 mile trips (including shopping), and just generally using cars a lot less than what I could currently make by buying a different car.

  33. Maggie says:

    Ford sells a car in Europe which gets 65 mph but it’s not going to sell it in the US. Why? Ford can’t afford to sell it in the US because Americans won’t buy it.


  34. Jade says:

    Gas prices aren’t going to stay this low, simply because the amount of oil we have on this planet is finite. I dunno if we’ve hit peak oil yet or not, but I’m sure we’re close. It’s not a matter of if gas hits $10/gallon, it’s a matter of when. And when it hits $10/gallon, that’s when I’m gonna sell my 16 mpg (on a good day) heap for gas money.

    To me, saving gas isn’t about saving money. It’s about having enough gas so the researchers and engineers who are working to make cars that don’t rely on fossil fuels can keep driving to work, at least unitl they invent a better way of getting us around so we don’t need gas anymore. Drill and conserve, stretch out the oil supply long enough for technology to move beyond the need for fossil fuels.

    Fortunately for me, while I’m in school my dad is paying for my gas and lets me use his debt card to do so. But, if I was paying for gas out of my own pocket, I would be budgeting assuming that gas was $5/gallon, and the money I would save on gas when I could get it for $2/gallon I would put into a new car fund. So I’d have $100 in my pocket to fill up my 20 gallon tank every week, but if gas was only $2/gallon then I’d be putting $60 a week into my new car fund.

    And if my heap dies before gas hits $5/gallon again, I have my eye on a 2000 or so Chevy Malibu. At least 20 mpg in the city I’ve heard… It’s not the greatest gas mileage, but it’s a lot better than 18 mpg on the highway on a good day and 10 mpg in the city. And anything is better than my Found On Road Dead… I’m lucky my dad is good at fixing cars, or I’d be driving that Malibu now…

  35. 144mph says:

    Alan Greenspan has some interesting things to say about gas prices in his new book, The Age of Turbulence.

    I’m also disappointed to see such little attention paid to the environmental costs of driving fuel inefficient vehicles.

    Everyone seems to agree that over the long term, a fuel efficient car is the better choice for a number of reasons. The problem is that everyone is acting in their own self-interest which leads them to make poor long-term collective decisions.

  36. T'Pol says:

    KC Comment 15: I am Turkish and as far as I know there is not a single drop of oil in my country. We are totally dependent on other nations.

  37. Michelle says:

    I agree that when it comes to the rebound of gas prices, it is not if but when. And it will make $4 a gallon seem like a bargain. I think we all would be wise to plan for that day. The global recession has temporarily hurt demand, but when things start chugging back to life, we will be left in the same position – not enough oil to go around.

    It would be great if everyone could act on the ideal of what is best for the planet, and one way or another we will hit the wall of excess and come crashing back to reality. Enjoy the lower prices while they last…

  38. Battra92 says:

    @steve: Some of us don’t believe in global warming or other fairy tales.

    Honestly, I would seriously look at your needs more than any other factors. Like you said the other day, you are sometimes envious of neighbors who can get their carseats in and out of a car easily. You can’t do that with a Prius or other such appliance car.

    Personally, I think kei cars are awesome but if I had kids, there’s no way I could own one (plus most aren’t street legal in the US.)

    I assume you guys will be looking for a good used one, right? In used it might not be bad to go domestic. Every mechanic can fix them and the parts aren’t that hard to find.

  39. Frugal Dad says:

    It does seem the combination of low gas prices and the tough auto market has presented a unique opportunity to upgrade vehicles for something more economical. I think prices will bounce back up some over the next few months as consumers react to the low prices and increase consumption. It seems like the pendulum swings from one extreme to the other.

  40. Gwen says:

    I’m troubled by this article and by the previous water saving article? The responsible/environmental conservation factor does not seem to fit into your plan of thinking when it comes to analyzing situations where you woudl have an environmental impact. Have we not learned anything from the past three years? Gas prices will go up. We have a responibility to look at our own lives and try to reduce the amount that we consume in fossil fuels, whether we pay the price in our car or for public transportation. I’m disappointed that these factors are not obvious in this post and previous post.

  41. steve says:

    @”Some of us don’t believe in global warming” .battra”

    It is true that some people don’t “believe” in global warming. However, my post was intended for those who do understand global warming and might appreciate a reminder that that making a vehicle decision based only on the current whim of marketplace fuel prices is shortsighted from the perspective of the impact on their neighbors, their communities, and their children’s and families’ futures.

  42. steve says:

    @ all the posters

    My above exchange with battra has reminded me that I have a request for everyone who visits this site, which I truly enjoy. I come here for education and to share with other posters and with Trent, not to be angered by someone insulting me, which it is clear to me that battra was doing with him comment. I also realize that what I posted above in response to battra’s post was insulting to him in its own way and I apologize to battra and to the forum members for engaging in a personal attack on this public forum.

    Please let us all remember that it’s possible to state our views and without being insulting and that it is possible to be respectful of each other as *people* even while being hard on the *issue*.

  43. Georgia says:

    Apparently those who “believe” in global warming by humans haven’t heard the old news – carbon dioxide is the “good” stuff. It’s what helps plants grow and oxygnate the world.

    As to gas mileage, Michelle, I have had numerous cars over the years – all used. My first to drive a lot was a 1979 Buick Electra Ltd. – the next to largest car Buick built. I did lots of highway miles and got 25-26 city and 29-30 hwy. It might drop a mile or two in the winter months.

    My next car was a 1991 Chev Lumina 4 dr. It got about the same amount. I have kept meticulous records on all the cars I have driven for the last 21 years.

    I now drive a 2000 Ford Taurus Station Wagon and I get 22-25 mpg in town and from 29-34 on the road. Of course, with this car I am using fuel efficient methods of driving. I drive 55-60 on the highway, park so I can pull forward, shut my engine down or put it in neutral if stopped for 10 seconds or more, use cruise and air cond when driving on the hwy. My last two trips my highest mileage was 32.9 and 33.9. And these were on 2 big cars.

  44. steve says:

    @ the comment , “Apparently those who “believe” in global warming by humans haven’t heard the old news – carbon dioxide is the “good” stuff. It’s what helps plants grow and oxygnate the world.”

    That is one, and only one, aspect of the known role of carbon dioxide in the ecosystem.

  45. Tracy says:

    I drive an 8 year old Ford Explorer that I paid cash for. I drove it all summer, spending $60 every 2 weeks to fill up the gas tank. Yes, it sucked, and yes, I griped, but getting rid of it was never an option. Last weekend, I paid $23 to fill up the tank, that will get me through two weeks of driving. I leave for work VERY early in the morning. This past Wednesday morning, I woke up to find 4 inches of new snow on the ground, with a layer of ice underneath. Snow plows hadn’t been out yet. I smiled a little on the inside, flipped the switch to 4WD, and proceeded to enjoy the drive to work. I even managed to get in a couple of donuts in an empty parking lot (kudos to anyone who knows what I’m talking about). If I were stuck driving some little econo-box, I would have just rolled over and gone back to sleep.

  46. Battra92 says:

    @Georgia, thanks for pointing that out. Water vapor is also a “greenhouse gas” so we should stop breathing out all that CO2 and water vapor I guess.

    Seriously, I was not trying to insult steve or call him out or make him feel victimized but I am trying to point out that for a most people, gas milage is truly a secondary concern. Even at $5 a gallon there’s no way you’d see some of my friends in a Prius.

    Saving the planet is okay for some people, but for a lot of people you really just consider that another option to consider. Not everyone can (or wants to) drive a little hybrid. Like I said before, give me a low priced kei-car for the summer and I’d be happy.

  47. J. says:

    @Gwen — this is first and foremost a blog about frugality and simple living. while such a lifestyle often has positive environmental benefits, the two do not always go together, and although Trent has clearly evinced a belief in the past that he personally shares your values, they’re also not one of his “first principles” for this blog.

    your assertion that the last three years should teach us something about the virtues of individual conservation is silly. there are many good reasons to conserve both water & fossil fuels, but there is nothing in particular about the last three years that teaches us that, particularly your assertion that with full certainty “gas prices will go up” — the last three years (looking at the price of a barrel of oil) actually seem to suggest that “what goes up, must come down” — but that doesn’t fit into your story so you ignore it.

  48. J. says:

    Addendum: what the last three years really show us is that “feeling good” isn’t enough to get most people to change their behavior, but a change in prices definitely is! if you want people to conserve water, energy, or any other scarce resource, you must bring the private price in line with the social costs by adding taxes, removing subsidies, etc.

    that almost certainly means government intervention of some kind, and is politically difficult, especially with gas prices. but it’s one of the few things economists of all stripes can agree about.

  49. steve says:

    I wanted to comment to Tracy, who wrote: “This past Wednesday morning, I woke up to find 4 inches of new snow on the ground, with a layer of ice underneath… I smiled a little on the inside, flipped the switch to 4WD, and proceeded to enjoy the drive to work.”

    This is a common sentiment among 4wd owners, and it’s true that 4wd does have certain advantages in slippery conditions. However, regardless of your statement about econoboxes, a Honda Accord or Civic that is properly equipped with new technology snow tires does pretty well too, I can tell you from experience. (I live in the Northeast.)

    I would like to point out that the primary utility of 4WD is in maintaining *driving* traction, which is primarily good at getting the vehicle out of standstill, but it has no effect on *braking traction* whatsoever. It is quite common for drivers in a 4WD vehicle to underestimate the stopping distance required for their vehicles because the added drive traction gives a false sense of the traction that is available for braking, which in an ice situation is minimal. Also, the high driving position tends to make most drivers *feel* that they are in a commanding position and hence safer, although if you looked at vehicle dynamics the Explorer, with its greater mass and higher center of mass, is both harder to both turn and stop than a lighter, lower vehicle, making it more difficult to avoid potential collisions. This is a case where the “feeling” of safety and control does not necessarily translate into actual safety and control.

    About the lack of effect of 4wd on braking: Maybe you knew that, maybe not…but I thought I’d mention it when I read your post. When you are braking, almost all of the braking happens on the front tires due to weight shift on the vehicle. They will quickly overload in a low traction situation and you will lose the ability to steer the vehicle while it slides straight forward (unless you use ABS braking properly or know how to, and are practiced at, and instantly begin cadence braking or “pumping the brake”). If you have a manual transmission, disengaging the clutch mechanism by pressing on the clutch pedal will also help you to regain control of steering. (you can also do this on an automatic, but you have to practice it because it’s a pretty small shift lever movement from drive to neutral).

    ABS helps in this scenario, but doesn’t necessarily reduce stopping distance..

    If anyone wants to read more about such topics, the book Drive to Survive is a good read that will teach most drivers quite a lot.

    Be Well.

  50. Kevin says:

    Maria from #3 – how is your diesel VW holding up? I’m thinking about one for my next car to replace a Jeep Cherokee, until our family needs something bigger again in 7 years or so when (if) we have 3 kids or more. I’ve heard VW’s are expensive to repair though.

  51. Kevin says:

    Global warming or not, I don’t see the reason for some people’s abject horror for wanting to conserve this planet’s resources. Why is it a bad thing to want to save some things for our kids, their kids, and so on?

  52. Just to echo Steve’s thought, whenever I drive down the highway during or just after a bad snowstorm, I invariably see SUV after SUV in the ditch. Steve is right in that SUV drivers tend to overestimate their vehicles. 4WD does not make it easier to stop and in some ways their high centers of gravity make them harder to control in many ways. Besides, 4 inches of snow is a light dusting ;) I woke up this morning to roughly 15 inches of fresh snow. Even though I have AWD with my Subaru, my main strategy is still to drive slowly and to give myself extra distance between me and the vehicle ahead of me. Finally, studded snow tires are in many ways the best option.

  53. Georgia says:

    Kevin – I agree with you. I do not believe in global warming as it is being taught. I believe it is a natural process. However, that said, I will do my part to be frugal and take care of this planet as far as I am able.

    Howsomeever, I will not do extraordinary things that are not cost effective. My 2000 Taurus uses E85 and I would love to use it. But – if the cost per gallon is not 45-50 cents, I cannot afford it. I am retired, on a limited income, and must make the money go as far as possible. My Taurus is only able to get 19-20 mpg when I used E85.

  54. steve says:

    @ Georgia
    I hear you about cost effectiveness. No one can be expected to make choices that they cannot afford. I do believe that when faced with a choice of transportation, within the reasonable limits of one’s needs, finances and capabilities, it is very important to pick the least harmful method. Based upon what your last comment, it seems that we are on the same page as far as that goes.

  55. Robert says:

    I’ve frankly been sorry to see gas prices decline as far as they have. Like J in comment 37 notes, people tend to change their habits more as a result of price pressures than a result of social or political beliefs (i.e. global warming and/or the need to reduce our reliance on imported oil).

    When prices were high, people paid close attention to fuel efficiency, both in the form of more efficient cars and in terms of their own driving habits. Now that prices have gone down, people are still looking for efficient vehicles, but they are definitely abandoning the habits that also lead to savings. Combining trips, driving their vehicles at the appropriate speed (for the best efficiency), using public transportation and similar tactics are starting to fall by the wayside as people shift their focus from conservation to convenience.

    But worse than this is the impact of low fuel prices upon the effort to develop alternative energy sources. People complain that “Big Oil” killed the efforts at developing alternative energy years ago, but that’s probably only half true (and I suspect that Big Oil is now one of the biggest backers of alternative energy research, in an effort to get in on the ground floor when a breakthrough is made). The biggest thing that managed to cut funding before, and appears likely to do the same again if prices remain low for too long, is the cost vs. reward comparison.

    Most alternatives to oil are expensive to develop and implement. Even if we suddenly have the “perfect” solution today (say a breakthrough in fusion power and we can sudddenly get limitless nearly free electricity anywhere we want it) we are facing hundreds of billions to trillions of dollars in costs to make use of it. All of the “gas stations” in the US will eventually need to be re-equipped to sell the new fuel. Methods for transporting it would need to be developed and then implemented on a huge scale (do we need fleets of tanker trucks, or millions of miles of new high voltage power lines to meet this demand?) Inevitably there would be political fights at the federal, state and local level over everything from regulating and taxing this new power source to fights over people not wanting unsightly new systems (like the aforementioned massive new power lines if we go with electric cars) near their homes.

    And then there is the cost to replace tens of millions of cars, trucks, buses, SUVs, etc. with new vehicles that use the new alternative energy. Even if we can simply modify existing vehicles to run off our new power source, that will still cost a lot of money when you apply it on a national scale.

    And that is the just the implementation costs. More than likely we’re looking at several years of expensive development down multiple potential paths rather than a single amazing breakthrough tomorrow morning. With gas prices going back down, our interest in funding both the research and infrastructure needed to make any of the potential alternative energy sources viable to replace oil in our lives is going to decline rapidly. While President-elect Obama wants to continue and increase funding to the research, he will need Congress to go along with this goal, something that will become increasingly difficult if prices remain low. Politicians are just as fickle as the public when it comes to doing the “right thing” since their primary interest is in being re-elected.

    Plain and simple, while low gas prices will help us save today, it will only make it harder for us to change our habits (and options) tomorrow. As I said before, I’d rather see the prices stay higher and the US continue to put the effort into developing an alternative and changing away from oil, than see everything grind to a halt until the next price shock.

  56. marie says:

    Trent, some of your readers have commented that they wished you had brought up the environmental aspect of purchasing a fuel efficient car. I appreciate that you do *not* specifically discuss environmental issues on this blog as it can unnecessarily complicate the finance subjects at hand. Many of your suggestions are inherently better for the earth (reusable products instead of disposable, etc), but (thankfully) you don’t get preachy about it.

  57. teri says:

    my comment never made it through moderation, apparently, so i’m going to try again…I really value the discussions we have around here!
    If only money were the only (or even most important) factor in considering many of our decisions, things would actually be much simpler. Alas, the cost you see is only the tip of the iceberg. What about the costs to the environment? What about the costs we see in the various taxes that need to happen to clean up/repair/restore/etc our air, water, and infrastructure? What about costs to society from larger-than-necessary vehicles that take up more space on roadways, in garages and parking lots, and on streetside parking? What about the cost to your children’s values when they see that you’ve made a choice solely on what’s good for YOUR pocketbook, not what’s good for the greater global community? What about the cost to your integrity, knowing you could have bought a higher quality, lower-impact product, but didn’t because it cost a little more? What about the cost to the overall market because we’ve continued to support the cheapest rather than the most sustainable options?

    This is the same as discussions about buying organic food, local food, or from local companies. The hidden costs of our choices are often dramatic, and we won’t see those until further down the line. A fuel efficient car (not necessarily a hybrid–there are very efficient non-hybrid cars), well-maintained and well-driven for maximum efficiency and life, should not be an option we who have to drive “consider”–it should be the baseline for what we’ll settle for. Our planet, our global neighbors, and our children deserve better than the cost we saddle them with otherwise.

    teri @ 3:09 pm December 4th, 2008 (comment #9)

  58. Tracy says:

    @Steve and @Penny Pincher-

    You are both correct that having 4WD is not a replacement for common sense and driving ability, I didn’t mean to give that impression. For the better part of my driving career (coming up on 25 years), I’ve had a 4WD vehicle of some sort. Stopping a 4WD vehicle is no different than stopping any other vehicle, the same tactics apply. I would argue, however, that steering ability is enhanced. I for one PREFER having the ability to “slide” the rear-end of the vehicle, if necessary, “steering with the throttle” so to speak. I can guide my Explorer through a slippery turn much better than my wife’s FWD mini-van. Most people that I know who learned to drive an “old-fashioned” rear-wheel-drive car agree with me.

    That said, the biggest advantage to 4WD is the ability to GO when it’s time to go. When the light turns green, I can be halfway to the next light while the mini-van beside me is still floundering at the last one.

    To each his own, I guess. I love winter driving, I love my Explorers (this is my third one).

  59. Nick says:

    I never really understood the fascination with SUVs. 90% of the people that drive them, would be more than perfectly suited to drive a regular sedan or something similar. Most of the time they refer to ‘safety.’ With all the other SUVs on the road, people are frightened that their regular cars would not fare well in an accident, and in turn purchase an SUV themselves, perpetuating the cycle. I guess I can sympathize with that, but there should be some kind of tax on those who feel they need to drive gas guzzling SUVs (increasing the demand, and as a result price of gas) who do not truly need them.

  60. Rkveith says:

    I suggest that everyone eliminate any travel in our country.(USA) Lets eliminate the gas prices to a very low level. Gas companies are totally corrupt so no thoughts for them.

Leave a Reply

Your email address will not be published. Required fields are marked *