Gas Prices vs New Car Sales

[ex98thdrill]

I'm not one to start many threads but was wondering, are the gas prices changing things at your local car dealers??

Right now there are a lot of pickups and SUV's sitting on the new and used car lots.

The local Dodge Dealer is advertising a deal that if you buy a new pickup, that they'll sell you gas for $2.99 a gallon for the first three years up to 12,000 miles each year.

The local Chevy dealer is selling new trucks at 0.0% interest for 72 months. Is this a factory deal, or are the new car dealers in your area doing the same thing??

[Bill Stoneberg]

Have you seen the numbers from June Sales ? Car companies and dealers are doing what it takes to try to survive.

Yes, the dealers are doing the same down in south Texas too.

Chrysler sales were down 36 percent with Dodge Durango off 67 percent, Chrysler Aspen off 49 percent and Jeep Commander down 68 percent. Ford sales were down 28 percent (F-Series pickups down 40.5 percent, Expedition off 59.8 percent, Explorer down 52.0 percent); GM down 18.5 percent (Hummer down 59.3 percent although Malibu was up 73.4 percent and Cobalt was up 21.6 percent); BMW down 11 percent; Nissan down 17.7 percent, and Porsche down 18.9 percent. Even Toyota was down a stunning 21.4 percent (with light trucks off 31.1 percent, Lexus Division down 21.1 percent).

[joe_padavano]

Just to prove how bad people are at math, I never cease to be amazed by the stories of people walking away from their current vehicles because of the mileage then spending $20,000 or more on a new economy car. Even at $4 a gallon, that's 5,000 gallons of gas. If your current vehicle only gets 15 mpg, that's 75,000 miles of driving (not counting the interest on the loan).

[ex98thdrill]

I bought a Ford Escort to save money on gas when prices hit $2 a gallon (which $2 a gallon is now a gift) for $2,800. After almost four years of driving, I have saved enough money in gas, but still haven't saved enough to cover insurance, plates and maintenence.

What kills me even more is to see someone spend $15,000+ for a motorcycle that gets good gas mileage but in areas where I'm from, you're lucky if you can get 4 months of good weather to ride it in.

For the last 5 years, I haven't been lucky enough to save enough money in gas on my Harley to cover the costs of insurance on the bike, let alone ever be able to pay for the bike.

As much as it hurts, you're almost just as well off to keep driving what you've got versus losing your butt on a trade in to go out and buy an economy car to save money.

[Dave@Moon]

You can easily make side-by-side comparisons on fueleconomy.gov. There's no mystery to the math, it makes perfect sense.

As an extreme, going from driving a 2008 Ford Expedition to a 2008 Toyota Prius results in <span style="text-decoration: underline">just</span> gas savings (at 15,000 miles/yr) of $3056.00 (@ $4.10/gal. It'll soon be worse!). That's a big chunk of any car payment.

If you're driving anything that's going to be replaced in the near future, factoring an extra 3 grand into the budget will change a lot of math!

Not only that, but it's pretty clear that burning less gas is the right thing to do from political, environmental, and patriotic perspectives. It's not as if people aren't willing to make sacrifices for their country <span style="text-decoration: underline">&</span> planet. Life is about more than money.

[Dave@Moon]

Besides, if you look at the bright side this country is going to be overrrun with cheap, low mileage tow vehicles for decades now. Trailer queens are no longer going to have to compete with soccer moms for conveyance means any more.

[ted sweet]

except none of us will have a job to earn money to buy.

[Reatta Man]

Joe!

Shhhhhhhh! What are you trying to do, man, let the secret out??

Everyone is being told by CNN and USA Today that they need to trade in a perfectly good car for a $10,000 loss for a Toyota Pius at $6,000 over window sticker in order to save money on gas! Pay no attention to the fact that so many dealers are now relying on 72 or 84 month loans to get the payments down. When you are making those $500 per month payments, you are supposed to feel good because you are saving the planet!

If you keep trying to make sense, the great lending corporations are going to send you to a reeducation camp.

Seriously though, sounds like you been listening to Dave Ramsey!

One of the other Joes in here

[Tom M]

One reason why wife and I will pay cash for our next new car. I don't like them car payments.

[Matt Harwood]

I just saw that they are giving you $8500 to buy a new Dodge Ram.

That $2.99 gas thing must be costing Chrysler a fortune. Right now it's a dollar per gallon per customer, but who knows what it'll be over the next 3 years.

[Reatta Man]

Matt,

Since this is such a gamble, I have wondered if Chrysler is trying to fund some of the cost of that $2.99 promo with insurance.

When companies practice Risk Management, they often like to have some or a large part of that risk underwritten by an insurance company.

But, anyway, from what I'm hearing, that $2.99 promo isn't really helping Chrsler that much. I guess the $500-600 per month payments are killing the sweetness of saving $1 per gallon on gas.

Joe

[joe_padavano]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">...That's a big chunk of any car payment.

If you're driving anything that's going to be replaced in the near future, factoring an extra 3 grand into the budget will change a lot of math! </div></div>

That's not my point. People here are walking away from one or two year old vehicles (and taking a several thousand dollar loss on their down payment) and plunking down $20K or more on a new "economy" car. That math doesn't make sense to me. Of course, in my case I spent $300 on a 1990 Civic that needed work. I put about $500 and a few weekends into the car (rebuilt calipers, new exhaust, and tune up) and the car gets 28 mpg city/32 hwy with my lead foot driving it. It's not pretty, but it sure saves gas.

[Guest Skyking]

Matt, from what I've read, you can take the $2.99 in gas <span style="font-weight: bold">or </span> a rebate. There are still buyers who need trucks and that might be a pretty good deal.

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">You can easily make side-by-side comparisons on fueleconomy.gov. There's no mystery to the math, it makes perfect sense.

</div></div>

I don't know what calculator your using, but mine don't add up.

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Matt Harwood</div><div class="ubbcode-body">I just saw that they are giving you $8500 to buy a new Dodge Ram.

That $2.99 gas thing must be costing Chrysler a fortune. Right now it's a dollar per gallon per customer, but who knows what it'll be over the next 3 years. </div></div>

The restrictions on the $2.99/gal offer are pretty stiff. You forego ALL rebates and incentives, you must buy 87 octane gas only, you get 12,000 miles worth for each of the next 3 years (based on EPA rating)--if you burn more than 12K miles worth it's on you--if you burn less they win, most of the really bad mileage models are not eligible (Grand Cherokee, Challenger, all SRT models, Jeep Wrangler, etc.), and the card only works on over-the-counter sales (no pay-at-the-pump allowed).

The first restriction is the kicker. Almost every model has a rebate/incentive that blows the gass offer away (even ar $4/gal.). Chrysler admits that only 4-5% of buyers are taking the offer instead of rebates & incentives, but it is bringing people in the door so they've extended it.

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">That math doesn't make sense to me. </div></div>

Pick a car and plug some numbers in the fueleconomy.gov comparison page I linked. It's amazing how much the average family spends on gas without thinking about it. When you're looking at thousands of dollars in savings over the course of the year, it matters.

Some people are happy driving a 15 year old beater that might get them home tonight, but most people need a reliable car. Most people looking at buying a new car to get better mileage aren't going to be 1989 Town Car owners. They'll be dumping the Trailblazer they bought 3 years ago without thinking. They're eating depreciation anyway, especially on gas hogs nobody wants these days, so swallowing that pill sooner rather than later is more just getting it out of the way then any added burden. It's not as if the dinosaur in the driveway is getting more valuable sitting there.

Besides, like I said (in so many words) it's the right thing to do. That's worth something. It's a nice feeling to be comfortable/proud of your vehicle choice in a time when it really matters.

[charlier]

Dave, maybe you can explain a few things about your post to me.....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">Pick a car and plug some numbers in the fueleconomy.gov comparison page I linked. It's amazing how much the average family spends on gas without thinking about it. When you're looking at thousands of dollars in savings over the course of the year, it matters.</div></div>

No question there can be savings when it comes to a more fuel efficient vehicle. When considering the savings doesn't one have to consider

the Cost of those savings? If one gets considerably less for a new "fuel hog" at trade in and stills ownes the bank a lot of money those costs

get rolled into the loan for the new vehicle. The costs from the depreciated vehicle (rolled into the new loan) cause the financing costs for the "fuel efficient" vehicle to be higher than if one purchased the vehicle without the "fuel hog" rollover. Shouldn't these increased costs

(in the form of higher loan interest) be subtracted from the savings to give a more accurate savings amount?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body"> They're eating depreciation anyway, especially on gas hogs nobody wants these days, so swallowing that pill sooner rather than later is more just getting it out of the way then any added burden. It's not as if the dinosaur in the driveway is getting more valuable sitting there. </div></div>

How can one say this is not an "added burden"? With all due respect, putting oneself upside-down in a car loan by $10, $15 or $20K when one dumps a "fuel hog" is an added burden to some people. Adding $10 or $15K to a 20K vehicle loan can easily add $200-300 per month to a loan payment. The additonal costs are from loans of $20K, $30K and $35K for 48 months at local bank rates for car loans.

The "fuel efficient" vehicle's loan has a higher interest expense and higher loan payments than a loan that does not include the cost of paying off the "gas guzzler's" loan. What happens if the "fuel efficient" vehicle is totalled in an accident before the upside-down loan is payed off? Will most banks roll over an upside-down loan from a totalled vehicle into another new vehicle loan? If a bank would even do this, wouldn't the bank charge an astronomical interest rate on the replacement vehicle loan?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">As an extreme, going from driving a 2008 Ford Expedition to a 2008 Toyota Prius results in <span style="text-decoration: underline">just</span> gas savings (at 15,000 miles/yr) of $3056.00 (@ $4.10/gal. It'll soon be worse!). That's a big chunk of any car payment.</div></div>

The savings are true if one does not also have to pay off a "fuel hog" at the same time as one is paying for the "fuel efficient" vehicle.

When that is factored in, the numbers change.

If my math is correct, $3056 represents a savings in fuel of $254.67 per month. It appears that the increased monthly payment of $200-$300 (see above) when dumping a "fuel hog" almost and/or entirely erases the fuel savings per month until the "fuel efficient" vehicle loan (that includes the impact of the "fuel hog" being dumped) is payed off. At the point when the loan is payed off, then the fuel savings are there and are not impacted by the cost of the loan to pay off the "Fuel Hog's" loan.

Obviously, if there is no loss on a "fuel hog" to pay off then fuel savings are not impacted and can amount to meaningful amount of money.

BTW, aren't most, if not all, vehicles depreciating assets? The "fuel efficient" vehicle in the driveway is not getting more valuable sitting there either. It is simply not losing value as quickly as the dinosaur.

Personally, I agree that there is money to be saved for SOME people when they purchase a more fuel efficient vehicle.

The mistake that SOME people make is that they FAIL to crunch ALL the financial numbers and look at the BIG picture.

[R W Burgess]

People, do not forget that the old gashog has a smaller insurance premium, and in the case of Virginia, darn near no property tax bill!

Wayne

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: R W Burgess</div><div class="ubbcode-body">People, do not forget that the old gashog has a smaller insurance premium, and in the case of Virginia, darn near no property tax bill!

Wayne </div></div>

I don't pay property tax on any of my cars. Just that makes me feel good.

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">It appears that the increased monthly payment of $200-$300 (see above) when dumping a "fuel hog" almost and/or entirely erases the fuel savings per month until the "fuel efficient" vehicle loan (that includes the impact of the "fuel hog" being dumped) is payed off.</div></div>

Obviously, but this is where the "doing the right thing" factor comes in. Some people are willing to pay <span style="text-decoration: underline">more</span> than their fuel savings in vehicle cost (not <span style="font-style: italic">just</span> beak even) to sleep with the knowledge that no one living in a cave in Pakistan or in a palatial chateau in Wyoming (this is where many of our esteemed oil executives live) is getting that money. Also with that comes the knowledge that their contribution to global warming has been reduced by many tons per year. Finally the knowledge that every drop you buy today will make the next one more valuable/expensive spurs many on as well.

There is also the matter of where all this stops. <span style="text-decoration: underline">Nobody</span> thinks $4/gal is the end. Our fuel costs have followed exactly the predictions made by "Peak Oil" advocates 10-15 years ago. I fully expected to be paying $6/gal. or more by 2012 when I bought my Prius (pre-Katrina) in 2005, based on the consensus of their writings. We're right on course.

The "BIG picture" is bigger than any simple (or complex) financial analysis can achieve.

=============================

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The "fuel efficient" vehicle in the driveway is not getting more valuable sitting there either. It is simply not losing value as quickly as the dinosaur.</div></div>

BTW, I think this is the understatement of the month, if not year!

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body"> Obviously, but this is where the "doing the right thing" factor comes in. Some people are willing to pay <span style="text-decoration: underline">more</span> than their fuel savings in vehicle cost (not <span style="font-style: italic">just</span> beak even) to sleep with the knowledge that no one living in a cave in Pakistan or in a palatial chateau in Wyoming (this is where many of our esteemed oil executives live) is getting that money.</div></div>

Dave, I guess it's how you define the 'right thing', which has a somewhat judgmental tone, but, no surprise there.

So, is it better to send your money to Japan? Why send more money anywhere if you don't absolutely have to? IMHO, most folks will do what makes the most economical sense in their situation, which in the era of upwardly mobile $4/gal gas is to conserve.

For one, I'll continue to drive my '87 Mazda B2000 pickup (27 mpg/25 with A/C) to rack up my 8000 miles a year. That's one Prius that doesn't have to be produced (~100 bbl of crude not used) and continued employment of existing manufacturing equity. For me, it's the right thing. Besides, I've yet to see a hybrid that will tote a 1500 pound load of yard waste to the green recycling center and return with a load of fresh mulch. This on top of the amortization timeline for a new $26K hybrid taking about 30 years for my use... not including increased tax, insurance, and maintenance. Conservation is more than just not using oil.

Cheers,

JMC

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body"> Also with that comes the knowledge that their contribution to global warming has been reduced by many tons per year. </div></div>

Now we see where this is all going................it's really not about saving money!

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> I guess it's how you define the 'right thing', which has a somewhat judgmental tone, but, no surprise there.

</div></div>

It's only judgemental if you interject yourself into the assumptions. I was talking about people who've already made their decision, not you.

Fueleconomy.org defaults to 15,000 mi./yr. for a reason. That's the average mileage an American registered car recieves per year. (Although obviously, since it's a skewed bell curve, the median is slightly less.) Therefore most cars on the road are "sending their money" somewhere to a large extent, whether they want to or not. Those are the assumptions behind all of my statements on this thread.

I assumed that a discussion like this one would have to be in the abstract.

If you want to get personal, my Prius gets about 13,000 mi./yr., and the savings in fuel pays several times over for the registration and insurance cost of my 1996 Ranger (4 cyl., 5 speed, 25 mpg) that I use for exactly the same reasons you use your Mazda (to the tune of only about 2,000 miles/yr. since the burden of normal work is handled easily by the Prius--including hauling 30-100 lbs. of recyleables per week from my church).

BTW, there is no increased insurance or maintenance with a hybrid relative to any comparably priced car/truck/SUV, and in most states the increased tax is minimal at best. In fact in Ohio my truck costs me twice what my Prius does in taxes because it's a "truck".

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Now we see where this is all going................it's really not about saving money!

</div></div>

Finally!!!

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">BTW, there is no increased insurance or maintenance with a hybrid relative to any comparably priced car/truck/SUV, and in most states the increased tax is minimal at best. In fact in Ohio my truck costs me twice what my Prius does in taxes because it's a "truck". </div></div>

I think everyone is aware that there is no premium for insurance/maintenance with a hybrid, it includes all 'new' cars... however, comprehensive insurance increases with the value of the vehicle, as do warranty preserving scheduled maintenance costs, and in many states, registration cost is based on the value of the vehicle. On a personal note, the old Mazda is a salvage vehicle (uninsurable for comprehensive; $0 cost; annual maintenance is two oil changes and whatever breaks/wears out (~$500 annually on average), and the registration (~$100/yr, including commercial vehicle surcharge and personalized license plates). I think I'm on the upside of the depreciation curve, too.

JMC

Saving the environment, one old car or truck at a time...

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Skyking</div><div class="ubbcode-body">Now we see where this is all going................it's really not about saving money! </div></div>

No, the real issue is reducing our oil consumption and the resulting reliance on receiving that oil from sources not friendly to our intrests.

The resulting important environmental impact is the reduction of particulate polution (in exhaust, tire dust, etc), nitrous oxide, hydrogen sulfide, and carbon monoxide. Those are the real pollutants. The concern over carbon dioxide is the biggest hoax ever perpetrated on the world,thanks to the political science bunk of the UN IPCC and Nobel Academy Award Winning Algore, but that's another whole kettle of old fish.

Cheers,

JMC

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: John Chapman</div><div class="ubbcode-body"> The concern over carbon dioxide is the biggest hoax ever perpetrated on the world,thanks to the political science bunk of the UN IPCC and Nobel Academy Award Winning Algore, but that's another whole kettle of old fish.

Cheers,

JMC </div></div>

Thanks John for clearing that up............again.

[charlier]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">Obviously, but this is where the "doing the right thing" factor comes in. Some people are willing to pay <span style="text-decoration: underline">more</span> than their fuel savings in vehicle cost (not <span style="font-style: italic">just</span> beak even) to sleep with the knowledge that no one living in a cave in Pakistan or in a palatial chateau in Wyoming (this is where many of our esteemed oil executives live) is getting that money. Also with that comes the knowledge that their contribution to global warming has been reduced by many tons per year. Finally the knowledge that every drop you buy today will make the next one more valuable/expensive spurs many on as well.</div></div>

Come on Dave, how many people today who are trading in their "fuel hogs" have such noble or idealistic reasons for doing so????

I am not saying these reasons are not valid. For at least a few people they probably are.

If one were to take a poll, it would most likely reveal that the #1 reason that many people traded their "fuel hog" vehicle was to SAVE MONEY on fuel.

Heck, you yourself, used the "savings" justification at least twice in this thread alone then added the "right thing to do" after you mentioned "savings" for the second time.

I suspect that the "doing the right thing" factor would come in a very distant #2 in a poll on this subject.

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">The "BIG picture" is bigger than any simple (or complex) financial analysis can achieve.</div></div>

For some people the "BIG picture" may indeed be bigger as you suggest.

Unfortunately, for more and more people in this country the "BIG picture" is becoming more about finding the money to provide the basics for their family.

They do not have the financial ability (some might call it luxury) to think any Bigger than that.

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The "fuel efficient" vehicle in the driveway is not getting more valuable sitting there either. It is simply not losing value as quickly as the dinosaur.</div></div>

BTW, I think this is the understatement of the month, if not year! </div></div>

Glad you found my statement entertaining.

I may very well be wrong with that statement, then again I might not be as wrong as you may think.

The current prices being paid for used, fuel efficient vehicles is viewed by many as the result of not enough supply for current demand.

Dealers do not have enough new, fuel efficient, vehicles to sell so they are buying up used vehicles at auctions at premium prices.

Once the auto makers catch up with the demand for fuel efficient vehicles, the premium prices currently being paid by dealers are sure to stop.

When that happens, even fuel efficient, used, vehicles will begin to lose their value although not nearly as much or as fast as fuel hogs have or will.

[Guest Charlie Larkin]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Skyking</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: R W Burgess</div><div class="ubbcode-body">People, do not forget that the old gashog has a smaller insurance premium, and in the case of Virginia, darn near no property tax bill!

Wayne </div></div>

I don't pay property tax on any of my cars. Just that makes me feel good. </div></div>

Bob,

Rhode Island has no excise tax???

Gee, maybe I'll move there after all!

Charlie Larkin

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Those are the real pollutants. The concern over carbon dioxide is the biggest hoax ever perpetrated on the world,thanks to the political science bunk of the UN IPCC and Nobel Academy Award Winning Algore, but that's another whole kettle of old fish. </div></div>

Oh dear! He's on to us!

[Guest Charlie Larkin]

I have a 1991 Caprice. On the highway, I can usually get into the low 20s, maybe up to about 24 if driven gently, and in need of a tuneup. I drive around 35,000 miles a year.

I'm considering getting a smaller car for running around, though. I'm not getting rid of what I have, I have enough stuff I move and times I need a wagon that I can't.

Does that mean I'm buying a new car? No. I found several nice clean older midsize sedans that will do what I want, mid-20s in town, probably high 20s-low30s on the road. And I get to stretch out a car that frankly is more valuable to me, and those big wagons are getting hard and expensive to replace. An clean, older car isn't a bad way to solve the problem, either.

For example, at a little used car lot around the corner from me, I found a 1995 Chevy Lumina with 29,000 miles (the odo goes to 999,999.9, so I can be pretty sure this is real mileage, and the interior agrees.) It needs a paint job, but for $1600....not a bad deal if you ask me. Previous experience with a Lumina with a 3100 shows a reliable 27-32 miles a gallon.

The automotive industry, and the American manufacturers, along with misguided government policy, are to blame for a lot of the problem. My big, full-size wagon will do 90-95% of any mid-size or larger SUV. Yet, because cars were tested differently, and there wasn't the profit margin because of additional federally-required design standards for a passenger car, we basically lost an entire class of cars. Even mid-size and compact wagons are hard to find and expensive, and make eminently more sense for most people than an SUV.

In many respects, the government is to blame because they started designing our cars and telling the market what the market wanted, not letting the market actually decide. Does that mean poor choices wouldn't have been made or forced on us? No, but I think the likelihood would be have been a bit lower.

Charlie Larkin

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">My big, full-size wagon will do 90-95% of any mid-size or larger SUV. Yet, because cars were tested differently, and there wasn't the profit margin because of additional federally-required design standards for a passenger car, we basically lost an entire class of cars. Even mid-size and compact wagons are hard to find and expensive, and make eminently more sense for most people than an SUV.

</div></div>

Actually the main reason SUVs took over was that they were cheap to manufacutre, and they had an incredible profit margin due to high prices protected by an outrageous tariff imposed around 1990 on imported trucks and SUVs. With no outside competition, three companies were free to price their products to each other's advantage, and market them as if there were some practical reason for them.

[Guest Charlie Larkin]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body"> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">My big, full-size wagon will do 90-95% of any mid-size or larger SUV. Yet, because cars were tested differently, and there wasn't the profit margin because of additional federally-required design standards for a passenger car, we basically lost an entire class of cars. Even mid-size and compact wagons are hard to find and expensive, and make eminently more sense for most people than an SUV.

</div></div>

Actually the main reason SUVs took over was that they were cheap to manufacutre, and they had an incredible profit margin due to high prices protected by an outrageous tariff imposed around 1990 on imported trucks and SUVs. With no outside competition, three companies were free to price their products to each other's advantage, and market them as if there were some practical reason for them. </div></div>

Wasn't aware of the tariff issue. Thanks for the additional information. Point of information: I was a freshman in high school when this was going on, and although paying attention, or at least trying to, didn't catch everything, and may have forgotten a few things over the years.

As to the rest, I thought I more-or-less said that. The profit margins on an SUV were much higher. I remember seeing in the early 1990s that GM made like $6000 on each Suburban it sold.

The profit margins were inflated, although I'm sure for other reasons, but as pointed out, the additional requirements cars had to meet, as opposed to trucks and vans. Compliance costs money, one of the reasons I would love to see the end of a lot of the government control on the economy, it causes as much trouble as it tries to prevent many times, and quite frequently, causes more troubles that are even worse than the problems sought to be cured/prevented.

Charlie Larkin

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> The profit margins were inflated, although I'm sure for other reasons, but as pointed out, the additional requirements cars had to meet, as opposed to trucks and vans. Compliance costs money, one of the reasons I would love to see the end of a lot of the government control on the economy, it causes as much trouble as it tries to prevent many times, and quite frequently, causes more troubles that are even worse than the problems sought to be cured/prevented.

</div></div>

Keep in mind that all those extra lights, seat belts, air bags, crumple zones, reinforcement bars, pollution controls, etc. don't just protect your health and safety. They dramatically lower your health and vehicle insurance rates as well, both directly and indirectly though countless means. Most, if not all, government requirements imposed on cars result in a net savings to the consumer <span style="font-style: italic">over time</span>.

"Cheap up front" isn't the best way to go in most endeavors anyway!

[Matt Harwood]

I have to say, I'm kind of glad someone is forcing the automakers to build cars that are safe. Without that, maybe we wouldn't have seatbelts, airbags or crumple zones--you saw how they laughed at Preston Tucker. Hell, we may not even have safety glass.

Without government mandates regarding economy and cleanliness, we probably wouldn't have the wondrously powerful and clean fuel injected monsters we have today (a Mercedes sedan with 720 pounds of street-legal torque! Holy cats!). Clean air forced the automakers to make their cars work better, and the net result was better cars. For instance, in 1986, the Ford Mustang GT had a 4-barrel carburetor and made 200 horsepower and 275 pounds of torque. The next year, they added EFI to basically the same engine and it made 225 HP and 300 torque, got 3 MPG better mileage and ran cleaner. I'd call that good technology no matter what caused its genesis.

Dropping wagons wasn't a governmentally-motivated thing. Sure, automakers made a lot of money with trucks by exploiting loopholes, but who forced people to buy them instead of wagons? SUVs were tough and adventurous. Wagons and minivans were for soccer moms with the elastic waistband jeans. If wagons sold and made money, they'd still be around in whatever form was most attractive to consumers. Fortunately, as a huge fan of wagons, I think we'll see a comeback in the coming years. Hatchbacks are the most popular body style in Europe, but almost nobody buys them here--our economy cars are mostly 2- and 4-door sedans. It's market demand, not the government guiding most of these changes.

I'm no fan of big government, but I think regulations in these areas have helped a lot more than they've hurt. The free market still guides automotive design and market choices.

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">Oh dear! He's on to us!</div></div>

I think it amusing that the much-ballyhooed UN IPCC document that has been the holy grail of the global warming panic has been debunked.

For example, the much touted 'consensus' of 2500 'scientists' gathered by the UN boils down to this: Chapter Nine of the original IPCC report that led to the global warming theatrics was actually <span style="text-decoration: underline">reviewed</span> by 23 scientists. The hypothisis of anthropogenic global warming (AGW) was endorsed by exactly <span style="font-style: italic">FOUR</span> scientists. To present this as a consensus of 2500 is a fraud. The perpetuation of this fraud has cost untold billions of dollars that could have been used productively. It is the poison fruit of a contrived process.

Climate Change? Yes. Always has, always will. AGW? Minutely... maybe... Every metric and model used to support AGW theory has been found to be essential fiction, created by selective data, deliberate manipulation, and faulty theory...

We've been conned, our governments have been conned, and the main stream media has and continues to perpetuate the panic.

Cheers,

JMC

[Guest John Chapman]

Matt,

I think you've made an accurate assessment. The current trend to 'cross over' SUVs is testament to "build to demand" marketing.

Cheers,

JMC

[Dave@Moon]

Of course. We're all scientists, and we're all evil. That's how the world works, you know!

Seriously John, I'd take a motive of extraterrestrial proportions to make for a believable conspiracy story that people are making this stuff up at this point. Just the one report you mention has 2500 <span style="text-decoration: underline">names</span> on it. If we accept that it was written by just 4 people and <span style="text-decoration: underline">any</span> of the other 2500 objected to the conclusions, how in the world would it have been kept <span style="text-decoration: underline">this</span> quiet <span style="text-decoration: underline">this</span> long? And there are <span style="text-decoration: underline">thousands</span> of similar reports out there with tens of thousands of names on them, the vast majority predicting accurately what has followed in the interim between their publishing and today (by as much a 30 years).

Beyond that I have no argument on the subject any more. It takes a level of faith to dispute man-made climate change at this point, which is why it's often called "<span style="font-style: italic"><span style="text-decoration: underline">believing in</span> Global Warming</span>" by the so-called "doubters". I have no interest in religious conversion.

It's real. The rest of us are dealing with it.

[Guest John Chapman]

Dave,

Your response answers how it can be kept quiet so long: Refusal to see the scam for what it is and why.

JMC

[joe_padavano]

Automakers have readily admitted that big SUVs, trucks, and luxury cars have a much higher profit rate than small cars. Trying to sell more of them and trying to increase profits is what businesses are supposed to do. If you were a shareholder, you'd want the company to maximize profits. I am still not aware of any time that GM or Ford has held guns to buyer's heads and forced them to buy a monster SUV to haul around their 1.8 children. This is also why I'm very unsympathetic to home buyers currently in foreclosure. No one forced them to buy far more house than they could afford with no money down. What part of "negative amortization" was not clear? Here in the DC area, the majority of the foreclosures are due to buyers who bought multiple houses on spec in an attempt to flip them a year later at large profits. I'm <span style="text-decoration: underline">REALLY</span> unsympathetic to their problem.