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102 comments on Countdown to $200 oil: International Energy Agency says current prices justified...
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You are making a really wild assumption that the average SUV owner will, or could, make such a rational calculation.
edit: verb tense
It is not the OWNER of the SUV that will make the calculation, but rather the BUYER of the used vehicle. Let's assume that the OWNER is forced to park the vehicle, or chooses to do so by having a bicycle, another (better mileage) car, etc.
If the vehicle is fully paid for, it is a depreciating asset that is incurring fees, such as lincense plates, insurance, etc. Why not sell it?
The BUYER doesn't have to know 3rd grade math. He knows the SUV will cost double per week/month to operate, compared to a sedan. Can he get a good enough price to justify this purchase?
Very good condition used vehicles will come down in price to make up for their poor fuel economy, I predict, rather than sitting idle.
I agree Pipefit. My coping paln for the next decade includes driving a large SUV that I am going to buy when there are many distressed sellers. I have calculated that $5 (AUD) per litre will still be economical to run for road trips with full family passengers and luggage. Daily commuting however will be by cycle (both motor and bi), bus and walking. Our road trips may not extend beyond a 500km radius from home but where we live we can access beaches, forests, snow, mountains, large metro cities, farmland, pretty much everything you could want to visit. Don't think I'll be making too many overseas jet flights though.
My brother bought a SUV for pulling a camper trailer, that they had yet to buy. Why he did buy it was not because of wanting an SUV perse` but wanting to pull a camper trailer for camping, which they do enjoy. Now he is regretting it, because gas prices are so high, with no sign of going down.
I know a local lady that parks her car to take the bus, just started doing it last month.
There will be a lot of changing habits, as we see in the US higher gas prices and longer waits for them to go down. Look at the Local news that Ford F-150 sales are down for the frist time in 17 years. I don't have a URL for checking that quote.
Paradigms are shifting still, lots of things are still going to be in flux.
Charles,
Still running for US President, as a write in candidate.
Psychoanalyzing the SUV driver is an inexact science, but I'll throw out my educated guess. I think most SUV drivers were psychologically clinging to the days of $1.50 gas. When gas hit $3, people complained, but there was a wait-and-see attitude hoping for the good old days to come back. Now that people have finally accepted permanently high prices, they're really adjusting from $1.50 mindset to a $4.50 mindset. Because of that the drop in price exceeds any rational calculation from the difference between $3 and $4.50 gas.
If you want to research actual selling prices of used vehicles, Ebay is a great resource. You need to log in to see completed auctions. I just looked at auctions of SUVs. A lot of them with 0 bids. A lot more with bids that didn't meet reserve price. Of the few that were sold, they're thousands off blue book price (from kbb.com, no idea how often they're updated). Here's one: 2001 Ford Excursion, 120,000 miles, 5.4l gasoline V8. KBB private party retail $9300, offered at Buy It Now price of $7900, sold for $6500.
Wow! That is a good example.
But, let me convey my experience as a California SUV owner:
My mindset is not stuck on gas at $1.50/gal. Or even something higher ~ $3/gal. But then again, I feel I am informed. I am in the transportation industry, know the cost of operations, and have always followed developments. I also visit this site. So, I am not the least bit ignorant relative to the average Joe.
But then again, I do not feel the average Joe SUV Owner is not all that dumb, either.
I feel the large majority of SUV owners only talked (ie. complained) about the price of gas around the water cooler at work or dinner table at Thanksgiving. Perhaps fewer than 5% took complaints to elected officials or posted on message boards or blog sites. Perhaps less.
As for me, I've had my SUV for 10 years. It's been paid for for many. Last month the transmission went out. I thought about what to do pretty often; replace it with a more fuel effecient car... hybrid or scooter. Or, join a carshare org like Zipcar. After all, I drive fewer than 5,000 miles a year and I really am not too dependant on having a personal vehicle at the ready. And, there are no less than 3 bus lines near me serving nearby major destinations. I also happen to be centrally located near downtown San Diego... which can explain why I do not accumulate many miles and pay through the nose for fuel.
With that said, I got the transmission fixed for $3000. This is more than what I could have sold it for IF the transmission had been working. Had I known what it would cost upfront, I may have reconsidered the decision. But, my SUV is paid for and I do not need to pay any large upfront cost for a replacement vehicle. The convenience and price is worth it.
Additionally, I have no idea where fuel prices are going. It could be that fuel will not be a bargain for any vehicle in the mid-term future... even for hybrids. So, I decided to ride the pump for the time being... and advocate for alternative fuels and energy sources.. and minimize my driving as much as practical. At current rate... my driving could dip below 3600 miles a year; or 300 miles a month.
When the future appears a bit more clear, I'll make a decision about what to do with transportation. More hybrids should be available in the next 2-4 years... providing a greater range of choice and lower prices (I suspect).
(edit: inserted important word)