2.75

[QuikSand]

Originally Posted by -Mojo Jojo-

Clearly the decision makes no sense in those terms, and if that's the rationale your friend gave you then it was probably a poor decision. However, the $12.50 is not the only concern when gas prices increase. The family's regular (non-travel) fuel costs will also increase, and the fuel costs may impact prices on goods they purchase as well, and if sustained could have a negative impact on the economy as a whole. In that context tightening the belt a bit may not be a bad idea...

I don't disagree... but you and I both know that when people see the price of gasoline go up, they react to the price of gasoline. They don't react to the anticipated increase in the price of lettuce and kleenex.

[hukarez]

$2.79 for 91 here. Some places are $2.93 I've noticed. Erg!

[Sharpieman]

*Laughs at SUV owners* (except those on this board of course. I feel sorry for yous guys).

[Sharpieman]

Oh and by the way, I hope everyone knows that gas prices aren't going to go down in the long-term. I predict that people in the US will start to think about not buying SUV's when prices get up to $6.00. No extra drilling is going to result in a massive price reduction, we must start working towards making more fuel efficient cars and work towards introducing more low-priced alternative energy powered cars.

[QuikSand]

Originally Posted by Sharpieman

I predict that people in the US will start to think about not buying SUV's when prices get up to $6.00.

Actually, I think this presents an interesting twist.

People like me complain that others overreact to increases in gas prices, at least in their statements and in isolated actions.

If gas prices do indeed stay high and even go higher over a long period of time, then we should expect there to be some basic change in attitude among people -- folks who really don't need large, gas-guzzling vehicles to start to make different choices, and prefer more fuel-efficient cars.

The market for hybrid vehicles has been lively, but remains pretty confined to a subset of the public. Maybe something like that can really catch on in the next political generation or so? It would be consistent with my theory that people are somehow magnetically predisposed to overreact to gas prices.

[st.cronin]

Originally Posted by QuikSand

Actually, I think this presents an interesting twist.

People like me complain that others overreact to increases in gas prices, at least in their statements and in isolated actions.

If gas prices do indeed stay high and even go higher over a long period of time, then we should expect there to be some basic change in attitude among people -- folks who really don't need large, gas-guzzling vehicles to start to make different choices, and prefer more fuel-efficient cars.

The market for hybrid vehicles has been lively, but remains pretty confined to a subset of the public. Maybe something like that can really catch on in the next political generation or so? It would be consistent with my theory that people are somehow magnetically predisposed to overreact to gas prices.

Sales of SUVs and 'light' trucks have been flat for several years now; people are already moving towards more fuel-efficient vehicles. One of the most popular SUVs today is the Saturn Vue which gets mileage comparable to a midsize sedan.

The hybrid vehicles haven't yet crossed that line where it is in the strict economic self-interest of the consumer to buy one; as the prices come down, it will cross that point, and sales will skyrocket.

[Balldog]

Originally Posted by st.cronin

Sales of SUVs and 'light' trucks have been flat for several years now; people are already moving towards more fuel-efficient vehicles. One of the most popular SUVs today is the Saturn Vue which gets mileage comparable to a midsize sedan.

The hybrid vehicles haven't yet crossed that line where it is in the strict economic self-interest of the consumer to buy one; as the prices come down, it will cross that point, and sales will skyrocket.

Yep and we make parts for SUVs and 'light' trucks.

[flere-imsaho]

Originally Posted by QuikSand

The market for hybrid vehicles has been lively, but remains pretty confined to a subset of the public. Maybe something like that can really catch on in the next political generation or so? It would be consistent with my theory that people are somehow magnetically predisposed to overreact to gas prices.

I slightly disagree here. Maybe if hybrids were only going to be things like the Honda Insight or the Toyota Prius, I'd agree, but now that the industry has been putting these engines in "normal" vehicles, like the Civic/Accord, the Escape and the Lexus RXwhatever, I think we'll see more "normal" Americans get these vehicles.

Again, it's psychology.

"People think gas prices are very high and won't come down" + "People think hybrid engines will save them money, even if they cost more up front" + "Carmakers offer hybrid engines in vehicles that appear and act normal in all other facets" = greater demand for hybrids.

My prediction is that within 5 years the vast majority of car models sold in America will have a hybrid engine option. As in, you can currently buy a Honda Accord with a normal engine (two choices, actually), or a hybrid engine. Extend this to virtually all models sold in America.

In 10 years the majority of vehicles on the road (just over 50% in 10 years) will have hybrid engines. Now, will they all get over 50mpg? Probably not, but they'll all probably get between 30 and 50 mpg.

[st.cronin]

I don't know about your timeframe flere - but for the most part you're correct. When I was working in the auto industry last year, I sat down one day to figure out the cost/benefit of a hybrid engine. At the time, it was clearly NOT a fiscally wise purchase. But it will be someday.

[flere-imsaho]

Originally Posted by st.cronin

I don't know about your timeframe flere - but for the most part you're correct.

Well, it's just speculation, really.

When I was working in the auto industry last year, I sat down one day to figure out the cost/benefit of a hybrid engine. At the time, it was clearly NOT a fiscally wise purchase. But it will be someday.

I agree. However, part of my prediction is my belief that a significant number of purchasers will "believe" that a hybrid will save them money, even if it technically won't. Of course, a huge part of the cost/benefit ratio is one's personal thoughts on how high gas will go. Someone who thinks gas will be at $6/gallon in two years may view it differently than someone who thinks we'll just be at $3/gallon in two years.

That's the psychology part.

[Crapshoot]

Originally Posted by gottimd

So are you saying people are ignorant, and not just generally upset about the rising gas/oil prices?

Missed this. I'm saying people aren't aware that oil prices have built in fear premiums, and that they don't understand that oil (and oil production) isn't limitless - OPEC is pretty close to capacity right now.

[Crapshoot]

Originally Posted by duckman

I think you give most people too little credit inregards to their understanding of supply-and-demand economics.

I think you don't understand that there is more than a simplistic supply and demand curve here - that there are externalities in play.

[duckman]

Originally Posted by Crapshoot

I think you don't understand that there is more than a simplistic supply and demand curve here - that there are externalities in play.

I understand it fairly well. You would probably be suprised by how many people I come to know that understand it as well.

[Arles]

Originally Posted by Sharpieman

Oh and by the way, I hope everyone knows that gas prices aren't going to go down in the long-term. I predict that people in the US will start to think about not buying SUV's when prices get up to $6.00. No extra drilling is going to result in a massive price reduction, we must start working towards making more fuel efficient cars and work towards introducing more low-priced alternative energy powered cars.

If gas goes to a point that makes traditional SUVs too expensive to drive to some people, the market will simply adjust and provide hybrid SUVs. In the end, the people's desire to drive SUVs will drive the market to provide a cost-effective solution for those not wanting to pay for a gas-guzzler. But, it's not like if gas reaches $6, the American will suddenly not want to drive or ride in SUVs.

[Crapshoot]

Originally Posted by Arles

If gas goes to a point that makes traditional SUVs too expensive to drive to some people, the market will simply adjust and provide hybrid SUVs. In the end, the people's desire to drive SUVs will drive the market to provide a cost-effective solution for those not wanting to pay for a gas-guzzler. But, it's not like if gas reaches $6, the American will suddenly not want to drive or ride in SUVs.

I'm torn on this. On the one hand, the SUV/Pickup's machismo appeal is not likely to change, and some indistrious manufacturer will figure out a hybrid engine with the power that people want (and don't need- but that's neither here nor there) and capture a fair amount of the market. That being said, we seem to be fairly far away from a powerful hybrid that could fit that market niche - it seems to me that development along these lines will increase when oil prices tend further upward - but little seems to be done for power (As opposed to efficiency) right now.