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Pain Point?

PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,854
edited April 10 in General
People started to grumble at $2 per gallon that gas guzzlers were doomed.

Then it was $3.

Now they're talking about $4 gas as the tipping point where people start to dump low mileage vehicles for more efficient choices.

Seems like we have a moving target.

Will we ever reach a Pain Point and see people dumping larger vehicles for more economical rides?

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Comments

  • kdhspyderkdhspyder Posts: 7,160
    I think the quick retreat of fuel pricing after the Katrina spike gave some owners and buyers hope that fuel would stay under $2/gal. Now that it's settled in the $2.50-$3.50 range lots of buyers are actively ignoring the gas guzzlers.

    I think it's been tipped as you say but those that have such vehicles are keeping them for the times that they are needed but picking up additional vehicles for everyday use. Sales of new BOF SUVs are down everywhere from 10-30%.

    A lot of these vehicles may disappear as the time comes to renew them.
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,854
    If you take a look at the car dealers, at least around here, most of the cars, new and used, displayed prominently for easy viewing from the road are larger vehicles.

    Just a casual observation ;)

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  • kdhspyderkdhspyder Posts: 7,160
    The profit is still in the big vehicles so it makes sense to promote them. But in the same way that bread, milk, eggs and OJ are in the far corner of a supermarket it makes sense to keep the high margin products in the customer's eye to make them walk the aisles to find the basic necessities.
  • volvomaxvolvomax Posts: 5,274
    I used to think so, but maybe not.
    Europeans routinely pay more for gas than Americans do.
    They still sell a fair number of big cars, and SUV sales are rising there.
    They also sell alot of small cars too, so maybe the tipping point is $5-6.00/gal which has been the traditional European price point.
  • blufz1blufz1 Posts: 2,045
    Buying behavior was changing at $3 but I would say $4 is a significant behavior changing pain point. A pain point a la 80's where there is a sea change in buying behavior. Don't get caught in a Guzzler resale wise.
  • PF_FlyerPF_Flyer Pennsylvania Furnace, PAPosts: 5,854
    Remember that from $1 to $2 looked like a 100% increase(igoring inflation)

    $2 to $3 is only a 50% jump

    $3 to $4 is only 33%

    So while each level is $1, the underlying increase in pressure can actually seem to be less to most folks.

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  • blufz1blufz1 Posts: 2,045
    Appreciate your point but look at the gross dollar difference. 15000/20=750 g x $4= $3000 a year for gas!. At 40 mpg you could save $1500 per year.
  • gussguss Posts: 1,181
    The price of gas may not be so much the problem but if we start to see lines like we saw in the 70's and 80's.

    I don't know if it could happen today, but if you were a driver back then , you remember the pain on sitting in line on you odd or even number day.
  • gagricegagrice San DiegoPosts: 28,850
    Big vehicles are a bargain right now. I have one Toyota dealer down $9k from MSRP on a Sequoia limited 4X4. It may be the one I buy. Still looking for the right color.

    If I was driving as much as you I would probably have a Jetta TDI. For me $5 per gallon gas and 15 MPG is not even a factor in my budget. My water bill is higher than my gas bill each month. We will run out of water before we run out of fossil fuel. I am going to ride in comfort. I don't plan on leaving a fortune to my children. If they get a $1000 when I die it will be more than I ever inherited.
  • dave8697dave8697 Posts: 1,498
    I ccould drive a Mazda3 and get to work and back in 2.7 gallons. I could drive an ext cab 4x4 and use 5 gallons.
    I end up parking the 4x4 and using a 3.8 L car that needs 3.1 gallons. The car was purchased for $1k more than a year's gas use of the truck. That was about $15000 less than the cost of a new Mazda3 would have been with tax and interest. I got 90% of the efficiency difference without the huge outlay. With a car that uses 3.1 gallons instead of one that uses 2.8 gallons a day to go to work, what price change in gas will drive me to PAIN? The savings that 40 mpg offers comes with other discomforts. The savings from an i4 over an efficient V6 is barely more than a dollar a day at $2.75 a gallon gas. With sales tax of $1100 for any new car, that's almost 1100 days just to recoup the sales tax. I know keeping a 4x4 around for weekend errands is costly but I kissed that money bye when I bought it. What I could recoup by selling or trading it is barely over half of what I bought it for. The majority of that loss has already happened.

    The pain was answered with the jump from 16 mpg to 29 or 30. That was from V8 to V6. The pain from 30 to 40 is only a 33% reduction in fuel cost. After the 100% from '03 to '07, getting back 33% of that with the convenience of a 40 mpg car doesn't seem so improtant. There in no room in the back seat of any 35 or 40 mpg car.
  • andre1969andre1969 Posts: 21,849
    Appreciate your point but look at the gross dollar difference. 15000/20=750 g x $4= $3000 a year for gas!. At 40 mpg you could save $1500 per year.

    Back in April, I borrowed my uncle's 2003 Corolla to take a trip up to Carlisle, PA and back. I averaged 37.4 mpg in basically pure highway driving. Now I was raised on big cars and pickup trucks, so I may be a bit biased, but I found that Corolla to be a cramped, uncomfortable, rough-riding, jittery, underpowered little thing. Short of some hybrids and maybe a Diesel Jetta or two, I doubt there are very many vehicles that I'd be able to get 40 mpg out of. So by my reasoning, 40 mpg is a mythical, unreasonable number to start with. And even some of these cars that people are claiming 40 mpg with, that's not automatically a given that I, personally, would be able to attain the same mpg with my type of driving.

    FWIW, I just came back from a similar trip in my 2000 Intrepid, and got roughly 30.7 mpg off that tank of gas. That trip ended up being about 281 miles. I paid $2.679 for gas. I figure that the Intrepid cost me about $4.34 more than the Corolla would have on that trip. That $4.34 spent was well worth the improved comfort, ride, handling, performance, quiet, stretch-out room, etc.

    I am curious though, to see what the "tipping point" truly is with gas prices. I'm somewhat insulated, as my commute to work is only about 3 1/2 miles, and even with all other driving I probably only do maybe 6,000 miles per year. Back in 2005 when prices started shooting up, I did make it a point to start cutting out unneccesary trips and such. And when the Intrepid finally bites the dust, it'll most likely get replaced by something more fuel efficient. But that's mainly because fuel-efficient cars have gotten better and more comfortable in recent years. I could probably be happy with an Altima 4-cyl, rated at 26/34, or even a Civic with the CVT, rated at 30/40, both of which would give me a savings over my Intrepid's 20/29. But if we were still in an era where small cars were of, say, 1976 Accord or Pinto quality, you wouldn't be prying my hands off the steering wheel of a Caprice or LeMans anytime soon!
  • dave8697dave8697 Posts: 1,498
    you are very insulated. work is 47 miles away for me. I have to fill the tank every 3rd day making that trip home 75 minutes long.
    I went with a 27 mpg car when I started doing that long drive. Gas was $1.59 back then. That was $5.57 a day for round trip to work. That price is gone forever.

    That same car is $9.30 a day for gas this week due to higher gas price. That's $3.73 more a day 3 1/2 years later. About a buck a year of increase in the per day cost.

    For a 3 mile trip to work that would be measured in pennies per day.
  • blufz1blufz1 Posts: 2,045
    You can have it both ways in a few years with a comfortable economical diesel vehicle.
  • andre1969andre1969 Posts: 21,849
    Oh yeah, trust me, I know I'm lucky! Heck, most of my driving is actually done in a 1985 Chevy Silverado! About the most I'd ever wish for out of that thing is 16 mpg on the open road. I actually find it more comfortable than the Intrepid though...easier to get into, and oddly, more supportive on my back. You'd think that the more supportive contoured seats they have nowadays would be better, but somehow, that thin, flat slab that they call a backrest on that Silverado just seems to hit my back in just the right place.

    My uncle used to drive a 1997 Silverado to work. His job was around 45 miles away. That truck would usually get around 18-19 mpg. He got transferred to a job that was around 65 miles away. The Silverado was getting up in miles, so he bought an '03 Corolla as sort of a sacrificial vehicle, to use to rack up miles and run into the ground commuting to work. I forget now how much gas was back in May of '02 when he bought it, but it was a pittance I'm sure, compared to today. He still has the truck, which he uses when he needs it, but does most of his driving in the car.

    I've tried driving that car a few times, to save gas, but for the most part, the fuel savings isn't worth the pain and agony it inflicts on my body!

    As for my Intrepid, the main reason I don't drive it is that I let one of my roommates borrow it. He works about 20 miles away, and in that commute the Trep would get around 25-26, whereas the truck would only get around 15. And being an old truck, I just wouldn't trust it to hold up with him pushing it that far every day.
  • ghastly prices...do the oil companies, oh, I'm sorry...it's the futures traders. And the oil companies. Do they think that everyone is going to just blindly go along with these spikes? It's driving increased development of alternative strategies, yes it is.

    Maybe they're trying to make, I mean squeeze, hay while the sun is shining. For them.

    2008 Mitsubishi Lancer GTS

  • daysailerdaysailer Posts: 711
    consequently, our "pain point" IS a moving target as we soon forget the "good ol' days" and adapt to the pain. I remember when gas first exceeded ONE DOLLAR/g and fuel economy was all the rage. The demise of the gas guzzler was a given, a "no brainer". But when the the world didn't end, people resumed their wasteful ways, even at a higher price. I don't know why the US population seems less affected by price than Europe, but we do seem willing to drive gas guzzlers at any cost.
  • gagricegagrice San DiegoPosts: 28,850
    The EU has adapted to the high cost of fuel, with diesel. They still have a lot of luxury vehicles to choose from that use less fossil fuel. Until we get close to the cost of fuel in the EU, we will continue to drive gas guzzlers. We do drive a lot more miles than the average EU driver. If all my trips were under 10 miles I would consider an econobox. With the crazy drivers on our freeways I will continue to drive a large safe vehicle. I don't care if gas is $10 per gallon.
  • toobertoober Posts: 1
    Gas may seem expensive, but it is still extremely cheap for what it is and how convienient it is.

    I agree with the idea of people adapting to the pain point. Its a hard habit to break, and in most peoples mind, they have no choice but to pay for it and whine about those "evil oil companies"
  • boaz47boaz47 Posts: 2,744
    It is more than fuel prices I think. When I was in England two years ago they were paying something like 7 bucks a gallon depending if I figured liters correctly. But not only that a Big Mac was 7 bucks. Food cost more, housing was pretty expensive and wages were less than here. So the break point would be easier to forget here. To use a public Rest room in London cost you a buck, well 50P and you can imagine the fun we had with that expression.
  • dave8697dave8697 Posts: 1,498
    The government gets a boost from high fuel prices. The $75000 a minute profit that Exxon makes is taxed heavily. I have to gross $5 to take home enough to buy a gallon of gas. Look at all the tax in the price of a gallon of gas. What else is there in it besides tax and oil coming out of the ground?

    Bush is now claiming a $168 billion federal budget defecit next year thanks to taxes on fuels rolling in.
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