Why You May Not Need an SUV

Many people are switching to more economical vehicles, giving up their SUV for a car, or perhaps a large car for a smaller car.

Besides high gasoline prices prompting some buyers to think about the fuel economy of the vehicle they're going to buy, two things are going on here.

First, people who feel they need a four-wheel drive vehicle--probably for driving in snow and ice more than through mud or other off-the-road conditions, since studies have shown that few SUV buyers actually ever take their vehicles off-road--realize that they have options other than an SUV, such as four-wheel drive car models from Mercedes-Benz, Audi, Volvo, BMW, VW, Porsche, Acura, Infiniti, Lexus, Mitsubishi, Mazda, Toyota, Honda, Ford, Cadillac, Lincoln, and Subaru (these are not all expensive makes/models!).

Second, small cars have become more appealing. At one time small cars were cheap and were perceived as cheap. Now, small cars can be had with nice appointments like comfortable seats and attractive styling in and out, and as great a choice of options as more expensive makes and models. And, after many unfortunate attempts by the American car manufacturers to produce small cars—"unfortunate" for a variety of reasons, including not taking small cars seriously or the mistaken idea that they could take a larger car and just shrink it--small cars from American manufacturers have gotten much better, and are now decent or even quite good in many of the real "car" qualities like ride, performance, and handling (steering, braking, cornering).

Copyright © 2012 by Richard Stein

Gas Prices Going up--Again

From my window I can see the price sign of a gas station, so I'm usually up on where gas prices seem to be headed. There was a recent dip that proved very temporary, and prices now are about 30 cents higher than they were during that dip. Said neighboring station currently shows $3.259.

I wonder how high the price of gas has to rise before people who own monster SUVs like Suburbans and Tahoes regret buying such a thirsty vehicle. And you know, if you follow this blog, that I have less than zero sympathy for those folks, because I regard them as destroying the planet. (Greenhouse gas emissions are directly proportional to gas consumption.)

Statistics show that, when gas prices rise, people are interested in smaller, more economical cars. When gas prices fall again, people go back to disregarding fuel economy when they're car-shopping, and in fact sales of large SUVs rise again. (This has been a problem for Detroit at several periods over, say, the last 50 years: They introduce small cars and then the price of gas falls and they can't sell those smaller cars.)

So we see that car buyers can be very short-sighted. The price of gas may fall but it will certainly rise again, kind of like the stock market. And, like the stock market, I'd wager that, long-term, the trend is upward.

Copyright © 2010 by Richard Stein