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What If - Gasoline is $5 a gallon in 2010?

electrictroyelectrictroy Posts: 564
edited March 21 in Honda
Could people afford it?

Assuming typical 20,000 per year commute:

88 mpg lupo tdi = $1100 a year
50 mpg prius/civic hybrid = $2000 a year
40 mpg civic or echo = $2500 a year

37 mpg accord hybrid = $2700 a year
31 mpg escape hybrid = $3200 a year
20 mpg "generic" suv = $5000 a year

Wow. I'd bet we'd see a lot of "under 30mpg" SUVs and cars get traded in. The difference between a 20mpg suv & a prius, the fuel savings alone would pay for the car in just 7 years!

troy
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Comments

  • gagricegagrice San DiegoPosts: 29,021
    Assuming typical 20,000 per year commute:

    If I drove 20k miles per year I would already have a VW TDI or Honda Insight. Probably the TDI to give me the added option of biodiesel and established longevity.

    For me it is not a case of affording it, I am just very frugal.
  • This seems more timely and plausable and most of us know it could very well occur. I'm more concerned with supply & demand because that could lead to "rationing" and anyone who listened to their parents that endured WWII can attest to what it was like having limited supplies of gas. We've led a pampered life with "over indugence" our way of life. We all know that transportation is going thru a metamorphis and changes are in the air. I still think that "MASS TRANSIT" is as much a concern as anything else. Maybe because I put 30 yrs in railroading. We engineers could move 40-50 times the weight product of one semi-truck. Next time you're on an expressway count the "big" trucks you have to share the pothole roadways with. Then think how much fuel the trucks and cars are wasting while sitting still going nowhere. Lastly, think about how much time is wasted in those traffic jams....NUFF SAID, don't ya think?
    Railroadjames( if only we wised up)
  • gagricegagrice San DiegoPosts: 29,021
    We engineers could move 40-50 times the weight product of one semi-truck.

    Do you think the railroads could ever make a comeback? Freight costs are getting to be a real issue. And trucking companies are probably the biggest barrier to getting cleaner diesel in this country. I'm sure one semi pollutes more than dozens of cars.
  • The impossible has finally happened....We found something WE agree on. Trucks (Semis not Suburbans) are part of the problem. Way too many clogging our roads and over polluting our air. Trains could make a comeback if only Congress would quit sucking up to the auto industry. Lobbyists run our country make no mistake. I just hope someone or some President has enough guts to do right by America. WE WILL SEE!
    Railroadjames(trains are fun)
  • kernickkernick Posts: 4,072
    you: I'm more concerned with supply & demand because that could lead to "rationing" and anyone who listened to their parents that endured WWII can attest to what it was like having limited supplies of gas.

    me: well if rationing was ever required, I'd want to make sure that the really frivolous uses of gasoline were curtailed first. No gas use for pleasure boats , RV's, and other purely recreational vehicles, would be a good start. Then everyone can quit wasting gas in lawn mowers, to make your lawn look pretty.

    And if gas does go to $3, the people who will be hurt are the lower-income. People who have $30K + to spend on a car are not going to buy a Focus because their gas bill is $2000 or $3000/year.
  • Since we all agree(for the most part) that there's a change in the air, I think it would be valuable to hear from salespeople if there are any out there willing to share what's going on in the "business". I'm curious as to the trends(if any) on the buying public. Other words...Are they changing over from SUV's even more than the current down turn of approx. 25%-30% thats been released by the business sector so far. Since Rebates are bountifull...do they really matter?
    Railroadjames(Big car sales has to be drying up)YES?
  • gagricegagrice San DiegoPosts: 29,021
    We found something WE agree on.

    I am sure there are many things we could agree on. I believe that wasting fuel is bad. I also believe the American public are getting the shaft by politicians that pander to lobbyist on both sides of the table. The shipping industry has blocked attempts to clean up the pollution by trucks and ships. The environmentalist's lobby settle for band aids on the pollution issue by forcing higher standards on the little guy. And it is considered a step in the right direction. Consequently the only high mileage cars that are allowed in are overly complex such as the hybrids. If our politicians were interested in clean air we would have clean diesel and 50% of the vehicles sold would get the mileage that we get with a few hybrids. If I buy a car in the next few months it will be a diesel. If gas goes to $5 per gallon I can ship the vehicle to Hawaii and live on my farm and get biodiesel for under $3 per gallon. It will not be affected by high gas prices for a quite a while. I do fine on papaya, bananas & mangos. And I can work on my own car without Toyota to tell me they have never seen that problem before. As much as you feel that hybrids are the answer to gas shortages, I feel diesel and specifically biodiesel is a better answer. Only time will tell which is right for America
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,893
    railroadjames, your question about what car salespeople are doing would probably be better asked over on Smart Shopper in the Any Questions for a Car Dealer? topic.

    I kow it's easy for these discussions to branch off into other areas, but try to stick to the topics as much as possible. Thanks!

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  • gagricegagrice San DiegoPosts: 29,021
    Here is a thought on the price of gas. If I were to drive my Suburban 15k miles in a year with a gas price of $5 per gallon. It would cost me about $5000 a year. The average mortgage in San Diego has increased in the last 5 years by over $20,000 per year. Even at $5 per gallon gas is not a big part of the average Americans budget. If the average car gets 27.2 mpg that cuts that expense in half to about $2500 per year. $200 per month compared to the average home mortgage written today being $2800 per month. At $5 per gallon gas is cheaper than drinking bottled water.
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,893
    There was a front page article in my local paper about how gas prices are affecting businesses and they were talking with "ordinary people" like a guy who delivers pizzas., who said something to the effect that it's costing him $3 more to fill up each time, yet he's driving a Geo Metro so I'm not sure what price he's comparing the current price to. The point being that while the price of gas has gone up, (although one station actually dropped two cents here today so my gut feeling that panic about prices has finally run out of steam seems to be making sense) that extra cost for gasoline is FAR from my #1 financial worry.

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  • gagricegagrice San DiegoPosts: 29,021
    that extra cost for gasoline is FAR from my #1 financial worry.

    I agree that only the poorest among us will be impacted by higher gas prices. They are the ones that cannot afford new cars that are more fuel efficient. They buy $300 beaters and drive them till the wheels fall off. I know my son delivers Pizza in the winter in Alaska when construction is slow. His 4Runner is not the best on gas mileage. Housing is a much bigger burden for him.
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,893
    If you're at the bottom of the ladder and are driving a $300 beater to death and it's costing you an extra $5 a week, it may hurt you a bit more than the guy who can afford to fill up his Hummer, but that $5 or even the cost to fill up simply can't be a MAJOR portion of your monthly/weekly budget. Food, shelter, and other basics pretty much dwarf what you would be laying out for gas. heck, milk is almost $3/gallon here and I need that whether I drive or not, and we're using 3-5 gallons/week on a consistent basis. Compare that to my car that I fill up with about 11-12 gallons every 2.5 weeks. Milk is costing me about $30 for every fillup that sets me back about $25!

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  • SylviaSylvia Posts: 1,636
    is being moved to the News & Views board where it will get more participants. It will also be available in the Hybrid Vehicles board, but depending on how you subscribe to things, you may have to add the discussion individually to your Subscribtions list to appear/track in your Message Center.

    Thanks!
  • davem2001davem2001 Posts: 564
    The bottom would fall out of truck/SUV sales and there would be waiting lists for hyrbrids and diesels. The current HP race would end, replaced by a MPG race...we've already sort of lived thru this in the 1970s

    As long as supplies were un-interrupted you wouldn't see any rationing - the rationing would be self-imposed ...people would drive less, use mass transit more, maybe you'd see a huge boom in telecommuting (work from home).
  • andre1969andre1969 Posts: 22,007
    I can tell you that I'm glad I got out of it before fuel prices shot up to $2.00 per gallon, let alone $3 or more! I used to drive mainly old, V-8 cars that would get around 11-15 mpg in that type of driving, but when the gas was $1-$1.30 per gallon it really didn't matter much. I figure that, driving those older cars, the fuel cost usually ranged around 9-11 cents per gallon. It had to be an incredibly busy night for me to have to put more than $15.00 in the tank, and on a night like that I would've taken in well over $100 in tips...sometimes closer to $150.

    Just by coincidence, I bought a new Intrepid right around the time gas prices started shooting up in late 1999. I had to really run the hell out of it to get worse than 20 mpg, so even when gas was up to $1.50-1.60 per gallon, I was still better off than when I was driving an 11-13 mpg Gran Fury but only paying $1.15 or so per gallon.

    Now though, that prices are up to $2.10-2.20 per gallon around here, that's putting my Intrepid back up to around the same cost per mile as those old guzzlers were back in the day.

    If I needed a second job today that brought in a lot of quick cash, I definitely would NOT deliver pizzas. I think nowadays I'd get a job as a waiter or bartender.

    Hopefully the delivery companies are paying their drivers a bit better these days to compensate for fuel prices. When I quit back in 2000 I was making $6.00 per hour, and the company paid me $1.00 for every delivery, plus the tips on top of that.

    As for my regular job, well I only live about 3 1/2 miles from work, so $5.00 per gallon gas probably wouldn't change my choice of car. However, I probably would cut down on "unnecessary" driving.
  • davem2001davem2001 Posts: 564
    Your post also brings up another thing - $5 a gallon gasoline would be inflationary across the board, everything including the price of a pizza would have to go up...if a pizza shop owner is paying the delivery drivers more, he isn't 'eating' that cost, he passes it along to the customer.
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,893
    The article featuring the delivery guy also talked with the pizza shop owner who said they haven't passed along increased costs so far. That's why I think that the media frenzy over this is dangerous. Emotion is big part of the market, and it's a fine line between informing the public and stampeding them.

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  • andre1969andre1969 Posts: 22,007
    what the typical delivery pizza might cost nowadays. When I used to deliver pizzas, I was somewhat sheltered from the true price because they'd always let us make pizzas to take home for free. But I remember we often ran specials of 2 large, 1-topping for either $15.99 or $16.99. With tax that would come out to $16.79 or $17.84, which worked out nice because usually the customer would just give us a twenty and say "keep the change". But if we did a special for $17.99, with tax it came out to $18.89, but still often the customer would still give us a twenty and say keep the change.

    I think pizza delivery is one of those things that could get hit extra hard by rising fuel prices, because the driver really gets put between a rock and a hard place. The driver has to pay more for fuel, but might not be compensated appropriately by the store. And if the prices go up, then the customers are going to complain and not tip the driver as well.

    And if the driver doesn't make enough money to justify doing that kind of work, he's going to find something else to do, which could actually make for a shortage of drivers if too many of them get squeezed. I know, for example, the store I used to work at did so poorly in the years after I left (I'd like to think my leaving had something to do with that ;-) that the company sold it off and now it's a privately-owned franchise.

    I'm guessing high fuel prices will make all sorts of other things go up in price, like groceries, building material, just about anything that's delivered by truck or train. Since most locomotives are Diesel-Electric hybrid, I'm sure rising fuel prices will hit the railroads, too.
  • carlisimocarlisimo Posts: 1,280
    My family has been towards the bottom of the ladder in the past, and in that case gas isn't the most important thing when choosing a vehicle; none of the affordable options are all that gas-guzzling, and either way you tend to buy exactly the minimum vehicle you need. My parents avoided long commutes with public transportation or by moving, but that was mostly to preserve our old cars' lives. But other families do have unstable work and long commutes, and high gas prices combined with gentrification will keep willing workers from certain open jobs. But gas is never the biggest concern.

    The people who seem worry about it the most, justified or not, are entry level white-collar commuters. They tend to accept longer commutes and have a longer list of "necessary" expenses like broadband internet (well, it is!). They also drive a lot more unecessary, non-commute miles, so when they pay a lot for gas they feel guilty because a lot of it is by choice.
    The hybrid hype has hit them hard, and my recent graduate friends are always asking me about them, even though they'd be stretching to buy one at current market prices. No one seems to realize how many miles they'd have to drive a year to actually save money.
    And lots of them who would've bought a small SUV might go for the car version, but few of them would've bought a Suburban or F-150 anyway.

    Those who do buy those vehicles (I'm thinking wealtheir suburbanite families) would survive the gas prices. So some'll keep the things, but for most families they're a low priority, and money not spent on the gas will go towards the other luxuries such families enjoy. There'll be a boom among high-end hybrids out of image and hoped cost savings. The only segment I see really suffering is the 4-door large pickups. At that size, it's the three-row-of-seats vehicles that'll survive best.

    But $5 in 2010 money wouldn't be too bad. If it gets there GRADUALLY, I think people will shrug it off.
    If there's a jump and a panic, GM's really screwed because their upcoming truck line is their only real hope in the near future. The streets will also be a little scary when commuter parents give the big vehicles to their (low-mileage) kids. Toyota and Honda will make a killing on high-end hybrids, and continue to make money on small cars. Not sure the domestics will do either.
  • bumpybumpy Posts: 4,435
    With a 3 1/2 miles commute, you could find a '67 Dart with a good body, convert it to an electric car, and save the Intrepid for the weekend.
  • larsblarsb Posts: 8,204
    I too, in my lower middle class past, have been in the crowd which sometimes had to choose between a six pack or gas for the clunker.....

    I can't recall how many times I made a purchase, and was getting less than two or three dollars change, and told the clerk "put the change on pump two" because I needed gas to get home and to work again before payday, but not enough to fill up.

    Thankfully, I am past those days, but there are probably MILLIONS of people who are in that boat...somehow trying to afford enough gas to make it until payday. It's not easy for them when gas goes up 37 cents in one year like it has recently. If it KEEPS going up, it makes it harder for those people and harder for the middle middle class too, which is where I sit. If I have to spend $65 to fillup my Honda Civic Hybrid at $5 a gallon, the folks who make $20K a year are going to be HATING LIFE trying to keep fuel in an old beatup gas guzzler.
  • davem2001davem2001 Posts: 564
    The article featuring the delivery guy also talked with the pizza shop owner who said they haven't passed along increased costs so far.

    The key word there is SO FAR - gas is "only" at around $2.15 (at least where I live)
  • davem2001davem2001 Posts: 564
    But $5 in 2010 money wouldn't be too bad. If it gets there GRADUALLY, I think people will shrug it off.

    Exactly - if it jumps overnight, that would be disasterous to the economy - panic, waves of inflation, etc....

    If it happens gradually, it will be a lot less painful, people will adapt, that's just "normal" inflation
  • andre1969andre1969 Posts: 22,007
    really isn't that far away, so if we're hitting $5.00 per gallon by then, I think that's going to put a serious hurting on things. The Shell station on my way to work is currently at $2.20 per gallon for 87 octane. If you figure 5% for inflation (which is probably a bit high), for 5 years, that would come out to around $2.81 per gallon 5 years from now.

    $5.00 per gallon would be seriously ahead of inflation. And that's REALLY going to put a strain on poorer people. They can't necessarily afford to go out and get a newer, more fuel efficient car, so they have no choice but to make do with the old gas guzzling clunker.
  • davem2001davem2001 Posts: 564
    yeah, ok...If it goes up gradually to $2.75, $3 a gallon by 2010 it will be pretty painless...

    Mainly, I meant in post 24 is, if it goes up gradually it still hurts but it's not a killer...if gas is suddenly $5 a gallon in 2006, it would be economic disaster.
  • kernickkernick Posts: 4,072
    you: at $5 a gallon, the folks who make $20K a year are going to be HATING LIFE trying to keep fuel in an old beatup gas guzzler.

    me: I would guess they'd be making more by then; but yes I think we all agree that it will be the lower income people who are affected the most. It may require a change in lifestyle.
    If you look around the world, we are about the only country where everyone can afford a motor-vehicle, or at least to run them as much as we do.

    The interesting aspect of energy cost increases though is that every $ that goes towards energy could have gone towards savings and retirement. If you're 20 or 25, you better not be complacent and feel you can afford $5 gas, because SS isn't going to be the same when you retire.

    The best thing people who don't have much money can do is not to own a car. It solves all these issues. Live close to work, and bike or walk.
  • bumpybumpy Posts: 4,435
    Or part together an '85 Accord from the junkyard.
  • gagricegagrice San DiegoPosts: 29,021
    If it happens gradually, it will be a lot less painful, people will adapt, that's just "normal" inflation

    If we are paying $2.15 a gallon with oil at $55 per barrel that would calculate out to $110 per barrel for gas costing $4.30. The magic price for oil is $80-$90 per barrel. At that price both making fuel from coal and extracting shale oil becomes economical. We have huge reserves of both shale oil and coal that can be used if the price reaches that $90 level. Unless the government adds tax to compensate for cars using less gas the chances of gas going much over $3 per gallon is slim. Some of the current price increase is due to our lack of refining capacity. We need to expand our refineries soon. Buying cheap gas from other countries is not good business.
  • davem2001davem2001 Posts: 564
    at the risk of going slighty off topic here - The same thing is happening with electrical power. We're not building enough new powerplants to keep up with growth of demand. I blame that on the NIMBY (not in my backyard) syndrome...
  • lemkolemko Posts: 15,189
    "The current HP race would end, replaced by a MPG race...we've already sort of lived thru this in the 1970s"

    Oh my God! Yuck! What a miserable, dull, ugly decade for car enthusiasts! Fortunately, I live very close to my workplace. I could probably walk to work if I got up earlier. At $5 a gallon, it would take $100 to fill my Seville STS and $125 to fill the Brougham. Provided I don't suffer any serious blows to my income such as a job loss or major illness, I could endure. I would definately cut back on some other expenses. If it got bad enough, I'd cancel my cable.
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