By on January 2, 2015

oklahoma-gas-prices

The auto world may be on an extended vacation thanks to the timing of New Year’s day, but the energy markets are still moving. Matt Smith of the Energy Burrito blog (and energy firm Schneider Electric) discusses the impact of lower gasoline prices for the American consumer. According to Smith, the savings amount to $378 million per day, or $80 billion annually.

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125 Comments on “Consumers On Track To Save $80 Billion Due To Lower Gas Prices...”


  • avatar
    -Nate

    Interesting how Diesel Fuel is dropping price so much slower .

    -Nate

    • 0 avatar
      dwford

      I’ve noticed in my area that the price of regular is dropping much faster than the midgrade or premium. Where there used to be a $.10 jump between grades, there is now $.20 jumps, as if regular is being sold as a loss leader

    • 0 avatar
      jrmason

      That’s because the countries infrastructure relies on #2 to function day to day. Cut the supply of diesel off, grocery stores go empty, gas stations shut down, fields don’t get harvested, construction stops, the rails go quiet. I could go on for hours but you get the picture. We need it, and we are going to pay for it.

      Say, if I start a gofundme acct will all you gas buyers donate a penny for every gallon you buy so I can enjoy some of the reliefs ‘yall are enjoying? Cuz so far, I’m not “saving” chit.

    • 0 avatar
      Pch101

      There’s more competition for diesel supplies. In addition to commercial transportation and agriculture, there are Europeans who cannot refine enough ULSD for their own use — they are importing refined diesel while they export gasoline that they don’t need.

      Buying a diesel in the US is a recipe for paying a premium (no pun intended) for fuel. Ironically, the Russians may help — as they increase their own ULSD exports to Europe, that should reduce the need for the US supplies.

      • 0 avatar
        krhodes1

        The price of diesel will drop like a stone once the demand for heating oil (which is diesel up here) ends in the Spring. Happens every year here in the northeast anyway.

        • 0 avatar
          Lou_BC

          krhodes1 – Winter diesel is basically heating oil.

          Government should invest in infrastructure for converting from heating oil to natural gas.
          It would have the benefit of reducing heating costs, reducing em!ss!ons, and free up oil for transportation.

          That would make much more sense than subsidizing natural gas and propane conversions for vehicles.

          • 0 avatar
            krhodes1

            Here, “home heating oil” IS diesel today. The only difference is red dye and no taxes on it.

            There is no point in making huge investments in natural gas in Maine until the supply problem is resolved. And good luck building major pipelines these days – see Keystone XL.

            In some relatively dense areas there is infrastructure being built, but the majority of the state is too rural for it to make sense to do so when gas is so much more expensive here than in other parts of the country. I disagree that it is the Government’s job to subsidize this. My taxes are quite high enough, thank you. +

          • 0 avatar
            redav

            It’s shocking how much energy old buildings waste. I have no problem with tearing down buildings in poor condition and replacing them to be better, more efficient, and more accommodating to modern fuels.

    • 0 avatar
      healthy skeptic

      It’s my understanding that increased supply is what’s driving down gas prices. (Increased domestic production, Saudis’ decision not to cut back, etc.) I’m not aware that there’s any corresponding increase in supply of diesel.

      • 0 avatar
        healthy skeptic

        Oops, stupid me. It appears diesel can be made from petroleum. Didn’t know that. Never mind!

        • 0 avatar
          -Nate

          You’re -NOT- ” stupid ” ! .

          Not knowing a thing is ignorant , a very different kettle of fish as you can learn from ignorance so no shame in it .

          Others here are clearly stupid as they cannot seem to learn from the same cause & effect over and over again .

          -Nate

    • 0 avatar
      jimbob457

      You are using as data posted prices that apply to a handful of diesel powered automobiles and light trucks. This is often almost a captive market.

      The real users of diesel for transportation are over the road truckers and railroads. I would rather know what diesel is going for (really) at a Petro truck stop.

      Homeowners in the Northeast also use it for space heating, but most already have filled their tanks for the season. Fuel oil distributors usually have a lock on any late-in-the season refills. Why should they discount?

      Posted prices for diesel retail at the pump will be the last to respond to cheap oil.

      • 0 avatar
        krhodes1

        @jimbo457

        Filled their tanks for the season?? I’ve filled my oil tank ONCE, with at least three more fills to go, probably four if it is a cold winter. ~125 gallons a fill, as you never let those things get too low. And I have about the most efficient boiler setup money can buy, a small house, and a relatively large tank. Many folks here get filled up every other week, if they have an old boiler and a large house. My grandparents place has two boilers, and being old folks they keep the temps at sauna level – they use better than 2500 gallons a year minimum. I wear a sweater at home.

        Something like 80% of the homes in Maine heat at least partially with oil.

        Diesel prices here ARE dropping, down nearly $1. But not as far as gas has. Prices WILL crash once heating season is over, which is 1 April, not 1 January. Best local price for regular gas I have seen is $2.34, best diesel is $3.09. Most gas stations are around $2.50, most diesel is around $3.20. I filled up in Dallas for $1.59 on 12/31, wish we would see that here!

        • 0 avatar
          -Nate

          ” Prices WILL crash once heating season is over, which is 1 April, not 1 January.”

          Not here they won’t ~ it might drop a few cents per gallon but Diesel fuel never drops they way RUG does in Cali. .

          -Nate

          • 0 avatar
            krhodes1

            Makes sense, I doubt there is a huge seasonal swing in the demand for diesel in CA like there is in Maine.

            Markets for fuel in this country are surprisingly local.

            Historically, diesel in Maine is priced somewhere between regular and mid-grade gas in the summer, and a bit more than premium in the winter. The past few years were a bit of an aberration (though still about a $.40-50 cent swing), but it has otherwise been true my entire adult life. We have had diesel vehicles in the family since I was about 10 years old, and I have owned a bunch myself.

        • 0 avatar
          jrmason

          Heating oil used to be big here too but the usage has sharply fallen. I used to heat with it, and when it could be had for a buck a gallon it made sense. But prices more than tripled in a years time and I dealt with it for a season before we made a change. Unless you have a super efficient boiler and a small space to heat, it just doesn’t make sense anymore given the price of natural gas.
          We also rarely see much of a change between winter and summer prices. I think the little that we see reflects the higher cost of winterized fuel as much as anything.

        • 0 avatar
          SaulTigh

          I’m glad I live in a place where everything is natural gas. I paid $72 last month for 68 CCF of gas. That’s a high bill. In the summer my gas bill is routinely $17-18. I spent maybe $500 on natural gas during the last year, for a 1200 sq foot duplex.

    • 0 avatar
      indi500fan

      Yes here in Indiana the gap between E10 and ULSD is now huge.
      Like 3.00 vs 1.70 (as low as $1.50/gal in some areas).

      • 0 avatar
        geozinger

        Same in Western Michigan (Grand Rapids). Gasoline is about $1.75-1.85, diesel is about $3.25-3.50. So much for my plan to buy a diesel Cruze…

        • 0 avatar
          krhodes1

          Enjoy it while it lasts, but I sure would not make any long-term plans based on the current prices. If I was replacing my BMW wagon, I would still buy a 328d over a 328i. I prefer the way the diesel drives. The extra $.50/gal for diesel over premium is rounding error in the costs of the car.

          • 0 avatar
            hybridkiller

            After I trim a position in my stock portfolio, if the share price drops I’m happy because I sold at a (relative) high. If the share price rises, I’m still happy because the shares I still own are rising.
            I have a similar attitude about fuel prices – regardless of how cheap gasoline gets, diesel is a dollar/gallon less than it was a year ago – and I’m still happy.

  • avatar

    Super Premium 93 is currently between $2.45 (NJ) and $2.85 (NY).

    You’d be a fool to think it’s not going back up.

    In January 2009 it was $1.89 for SP93.

    I’ve been paying between $3 and $4.20 since then.

    With HELLCAT being recently unleashed on the public, plwe need prices to stay as low as possible.

    • 0 avatar
      Sjalabais

      Hm…I still pay exactly 7$/gallon in Norway, and that’s only so little because the krone has taken a solid dive at the same time that the dollar is strengthening to just about all currencies.

      Can’t imagine how nice a 75% fall in gas expenses would lubricate our family finances.

    • 0 avatar
      seth1065

      BTR,
      Glad to see your 2014 ban at TTAC is over, I am sure FCA is lower the price of gas so you can enjoy all of their products , btw RUG was $1.91 today in NJ, full serve , of course credit price , love it while it lasts.

    • 0 avatar
      05lgt

      Good to see you back here. HELLCAT should always be all caps. My sick little mind hopes they make a lower volume higher performance version and call it a THUNDERCAT. Factory NOS should do it.

      • 0 avatar
        Lie2me

        Why not just name it the “OH SH!T!”?

        • 0 avatar
          -Nate

          Those here who actually know me , know I prefer to drive smaller vehicles improbably fast , it allows me to pretend I’m going faster than I really am and I still get to keep ahead of almost everyone else in the twisty bits as the V8 & Hot Rod Crowd generally is deathly afraid of anything but straight lines and donuts in intersections…

          That being said I grew up in the dayze of BIG ROMPING , STOMPING V-ATE ENGINES so I have been pleasantly pleased to see these new HELLCATS in Grabber orange )?correct color name?) doing what V-8’s do best : launching from a dead stop , roaring off as they row through the gears shredding the tires , stopping traffic and making me smile a yard wide as they tear off into the distance….

          -Nate

  • avatar
    SCE to AUX

    Ironically, the charger for my Leaf is made by Schneider Electric.

    The state gas tax here in PA went up by 9.8 cents on January 1, by the way, making it 51.6 cents/gallon. It’s scheduled to go up another 8 cents in 2017.

    • 0 avatar
      Michael500

      In CA gas went up 10 cents on JAN 1 for a new global warming state tax. It may go as high as 70 cents a gallon, in addition to the highest rate in the country. The majority of CA voters are idiots and Democrats. No place for educated white males like me anymore.

      • 0 avatar
        Power6

        So what are you still doing there?

        • 0 avatar
          Michael500

          Grew up in LA, won’t be retiring here when Jerry Brown/Democrats blow up Prop 13 and take my house away with $15K a year property taxes. I guess it’s just hard to accept the reality of the people voting like idiots here and me being the minority. The Mexicans and Asians brought their corruption with them vs. assimilating and acting like Americans. Add in the poor-white-trash that can’t think for themselves and you have 60% of the dumb people that control the smart people.

          • 0 avatar
            Lie2me

            Um, weren’t the Mexicans in California first?

          • 0 avatar
            -Nate

            @ Michael500 :

            Oops ! you’re lying again ~

            Prop. 13 is/was a gop money grab ~ it _permanently_ excepted corporations from paying property taxes whilst suckering the stupid conservatards with a one time roll back of property taxes no one _ever_ took your house and it has bankrupted the state by allowing rich people to play by a different set of rules and not pay the same property tax rate as do the rest of us .

            This gas tax was another gop rip, Governor swartznegger signed it in cleverly making sure it’d go into effect long after he was gone so stupids like you can lie some more and blame it on anyone but your own stupid asses self .

            Please leave .

            -Nate

          • 0 avatar
            VoGo

            Michael500,
            You may be here by accident – this is a website about cars. The Truth About Bigots is one aisle over, on the right. Far right.

      • 0 avatar
        indi500fan

        Cap N Tax on a national basis was a liberal’s dream program. Generate big money for government, and put all the blame for surging energy costs on “greedy utilities” and “big oil”.
        Unfortunately on a state basis, folks can look across the border and see that it’s not happening over there.

        • 0 avatar
          Michael500

          Right, gas will be $1.90 across America soon and it will be $2.70 in CA. We have a higher share of idiots/Democrats here.

          • 0 avatar
            -Nate

            @ Um, weren’t the Mexicans in California first?

            Yes of course but that doesn’t matter if you’re an ignorant hater , does it ? .

            Talk about ‘ Culturally Deprived ‘ , I didn’t know what Mexican Food was until I came to Cali. in 1969 .

            -Nate

          • 0 avatar
            redav

            “weren’t the Mexicans in California first?”

            You can’t really call them Mexicans, though. During the time the territory of CA was under Mexican rule, their population there was small.

  • avatar
    DeadWeight

    That’s about 22 cents per vehicle per day based on # of vehicles on road (per registrations).

    Of course, that’s a simple average. A far more useful metric of savings would be measured via a miles driven/mpg algorithm, and for those driving inefficient vehicles many miles (40 or more) every day, their savings will be far greater.

    Also, Cadillac ATS & CTS owners don’t see much benefit given these lower fuel prices, since their cars are more likely to be at the dealership for mechanical repairs, and their loaner Nissan Versa gets good fuel economy.

    • 0 avatar
      John R

      “Also, Cadillac ATS & CTS owners don’t see much benefit given these lower fuel prices, since their cars are more likely to be at the dealership for mechanical repairs, and their loaner Nissan Versa gets good fuel economy.”

      Whoa. Where’d that come from?

      • 0 avatar
        Lie2me

        It came from DeadWeight or as some call him Lucifer Lord of the Underworld the Anti-Cadillac himself

      • 0 avatar
        DeadWeight

        I was using the Cadillac ATS & CTS as benchmark examples of unreliability to demonstrate that if one owned/leased a car that was frequently in for warranty (or non-warranty) repairs, and their dealership (based on manufacturer policy) loaned them crappy penalty boxes (which tend to be fuel efficient) during this period, any potential savings from the drop in gasoline prices would be mitigated against for those particular owners/lessees.

        Example of dialogue:

        Ms. Smith (pulling into service bay with Cadillac ATS violently shaking at low rpm): “I think there’s something wrong with my shiny new ATS!”

        Tatted Out Cadillac Service Advisor on Duty: “Aight. It sounds real good to me, little missy, but we gonna look under their fer ya anyways, cuz we be the standard of the world. Please follow me and I’ll get a Nissan Versa Note for you to drive for the next 7 weeks while we try to diagnose any problems with your special Lululemon-Melody Lee co-branded Special Edition ATS.”

      • 0 avatar
        dal20402

        DeadWeight worries that he’ll be banned if he can’t find a way to slam a) Alpha-based Cadillacs and b) Melody Lee in every single post.

      • 0 avatar
        hybridkiller

        I think if DW were on a gardening enthusiasts website he could turn a tomato growing discussion into one about Cadillacs (or die trying).

    • 0 avatar
      EAF

      Lol @ Dead! Did something happen to you? At a young age? Perhaps, in the backseat of a Cadillac? Was the clergy involed? I think your comments could be more productive if directed elsewhere, for example, sharing similar sentiments on VW!!!!! :)

      $2.87 here for 93 octane. This week I spent more on coffee than on fuel. I’m loving it!

    • 0 avatar
      DeadWeight

      Melody Lee is a blöde fotze & Johan de Nysschen is a blödes schwanz that are in the process of setting fire to any remaining shred of tangible goodness or intangible goodwill that Cadillac may have left.

      It’s a very sad thing to watch play out in real time.

      I apologize for being sentimental about Cadillac, a once iconic American MANUFACTURER of fine automobiles (that had a great brand DUE TO BEING A MANUFACTURER OF DESIRED PRODUCTS, Melody ‘shit-for-brains’ Lee).

      • 0 avatar
        shaker

        “Melody Lee is a blöde fotze”.

        Wow, that’s nasty.

        How can someone so small (and kinda cute) arouse such ire? I think she’s just doing what she’s paid to do (oops… ?)

        I’d bet she’s about 4’6″ in heels, and thinks the ATS’s rear seat is ‘cavernous’. :-)

        • 0 avatar
          Lie2me

          Because she’s a twit who probably didn’t know what a Cadillac was until she got the job and now she’s going to create brand cachet when they should be creating cars that create their own cachet. That’s how all the other cool car kids do it

    • 0 avatar
      bunkie

      Hey kids! Play the fun, new game, Carry That Deadweight!

      The object is to find any thread on any non-Cadillac topic that *doesn’t* contain an anti-Cadillac rant by Deadweight. You get extra points when (and if) you can find two such threads in any given day!

    • 0 avatar
      SCE to AUX

      @DW: I enjoyed your rant; you won’t catch me in a Cadillac.

      • 0 avatar
        -Nate

        ?? Is there really Cadillac hate ?? .

        Or are you alls just goofing ? .

        I love my 1980 Cadillac Fleetwood S & S Victoria hearse….

        There’s nothing wrong with Cadillacs driving a ’55 Coupe DeVille won’t fix , right ? . I’ll never get tired of those old Caddys .

        -Nate

        • 0 avatar
          05lgt

          I’ll avoid answering for anyone else, but for me the big problem with the. current Cadilac is that they in no way live up to the legacy established by that 55 and many other great cars that were named that. The interiors are bad for a car with the brands price and intentions, but otherwise if they had another name I’d like them more.

          • 0 avatar
            -Nate

            Sadly I think I understand .

            In my ‘hood , Caddies are all either ’68 ~ ’72 Drop Tops owned by Old Guys or blinged out Escalades I wouldn’t have for free .

            When the Northstar was new , a Welder @ Work bought one and promptly wrecked it , my Son tried it and scared the poor guy sh*tless , later remarking ‘ it goes O.K. for a Land Barge Pop ‘ .

            Cadillac was always an image car but in my youth it was also a good one .

            BTW : gas dropped another ten cents in California , so much for that new tax hysteria .

            -Nate

  • avatar
    Halftruth

    I’ll take that as a good thing- though some will say it is bad for the economy. One bad thing could be for those that will dump their current rides for something else and get caught when prices inevitably go back up. Happens every time.

    • 0 avatar
      dal20402

      Yep. If you want a Prius, buy it when gas is $2. If you want a Suburban for some odd reason, buy it when gas is $5. In either case you’ll get a great deal.

      • 0 avatar
        wsn

        If you want a Prius, buy it when it’s on sale.

        The said sale may or may not relate to a $2 gas price.

      • 0 avatar
        05lgt

        This. I got a used CUV when gas spiked over $4. These next few months would be a great time to buy a used Prius.

        • 0 avatar
          -Nate

          Does anyone here seriously want a _Prius_ ? .

          We have them in our Fleet , they’re flat out dangerous in spite of the good fuel economy .

          Municipalities dump them in VGC if filthy interiors for about $1,500 , no thanx .

          -Nate

          • 0 avatar
            raresleeper

            “Does anyone here seriously want a _Prius_ ?”

            NO YOU DID INT, NO YOU DID INT!!!!!

            Careful whatcha say ’round these parts, Nate.

            Prius is the holy grail of the EV/Hybrid Mafia. Not only are they thick as thieves, but inconspicuous, as well.

            They have no problem whatsoever smiting the nonbelievers.

          • 0 avatar
            Lie2me

            They’re slow and stupid and their owners have the reputation of being self-righteous left lane hogs

          • 0 avatar
            raresleeper

            Don’t get me started on them damned Leaves!

          • 0 avatar
            05lgt

            Not me. The TMC hybrid that catches my eye is the GS450 F-Sport Hybrid. Those will never be a good deal, but I want to try one anyway. Likely because I’m more interested in a good ride than a good deal. Is there some way to manipulate the market and make HELLCATS affordable? (It just looks better in all caps.)

          • 0 avatar
            shaker

            “They’re slow and stupid and their owners have the reputation of being self-righteous left lane hogs”

            I watched an orange Challenger 392 back up 4 cars in the left lane yesterday, and then nail it to show how fast he could pull away from the jam that he created.

            Nice car, though.

          • 0 avatar
            Lie2me

            Well, that’s a self-centered dickhead, big difference

          • 0 avatar
            shaker

            “Well, that’s a self-centered dickhead, big difference”

            I couldn’t judge the exact shape of the driver’s cranium – the window tint was too dark…

            A safe assumption, though. :-)

          • 0 avatar
            Luke42

            I like my Prius a lot. It’s a very practical little car.

            At 165k miles and over a decade since my wife bought it, I’m starting to transition from thinking of it as a “comfy old shoe” to thinking of it as “cockroach”. In the best possible way, of course.

            I’ll admit that it’s more fun to own it than it is to actually drive it. But the last “driver’s car” I owned was a POS. And, honestly, I driven large & small cars, large & small pickup trucks, motorcycles, tractors, a variety of aircraft, and I’m starting to learn about boats. I’m adaptable enough enjoy them all, and the Prius is no exception.

            I’ll take the “unremarkable driving dynamics” along with “exceptional fuel economy” and “cockroach-like reliability”.

            The Prius isn’t the only car we own, but it has outlasted the parade of practical cars that has come and gone from our driveway over the last almost-decade.

            The Prius is a great used car buy, especially when gas prices are low. Think about it: the Prius does typically attracts goody two-shoes type owners who have no intention of hooning the vehicle (and it repels anyone who looks past its reputation because hooning it *is* boring and noisy), AND it has a ton of computing power under the hood which spends every millisecond trying to find the lowest energy / lowest stress way to do whatever the driver asked (or tells the driver to wait). Those properties of the vehicle mean that a Prius with 100k miles on it isn’t really an old car. So, yeah, there are reasons to buy them used: they’ve been treated well AND they’re reliable AND they’re efficent. Assuming you intend to drive it like the low TCO grocery getter and cubical taxi that it was engineered to be, it’s a great car.

            Of course, if your mission includes towing, driving on gravel, or some sort of subjective “driving excitement”, you’d probably best leave these cars to those of us who actually appreciate them.

  • avatar
    Master Baiter

    The environmental wackos are surely beside themselves.

  • avatar
    energetik9

    I’ve written on this before. Although there is beyond question a cost savings, I’m suspect when people quantify it like this. Induced demand will result with people using more gas on the basis it is cheaper and lowering thresholds mean that some people change habits, such as not combining trips like they may have in the past. I’d also bet that some consumers are buying cars without MPG being as strong an influencer as it would have been at $3.60. I’m not arguing there is savings and I’m certainly nor complaining based on my own wallet. Just not sure I believe some guy from a blog has done his homework to arrive at an $80M figure.

    • 0 avatar
      dal20402

      Yeah, this. People adapted when gas flirted with $5 by driving less and paying a higher premium for fuel economy. Now they’ll adapt as well, by driving more and driving guzzlier vehicles. The amount that was used on gas before and will now be used on something else is not as high as this kind of simple calculation would suggest.

    • 0 avatar
      EnergyBurrito

      Hi – while I am a blogger, my day job is as a global commodity analyst. (it is awesome). I’ll explain to you how I did my homework:

      The national average retail gasoline price a year ago ($3.25) was a dollar higher than now ($2.25). The US consumes 9 million barrels a day of gasoline, which is 378 million gallons (42 gallons in a barrel). Hence the consumer is currently saving $378 million per day.

      Retail gasoline prices averaged about $3.20 last year. If they average $2.60 in 2015 as I said this morning on CNBC, then the $0.60 saved per gallon x 378 million gallons x 365 days in a year = $82 billion dollars (not million).

      While I completely agree that there are behavioral changes underway which impact gasoline demand – more older people (who drive less), younger people driving less (living in cities, using public transport), ecommerce, working remotely, greater fuel efficiency, etc – gasoline demand is relatively inelastic to price movements, and demand has oscillated around 9 mbpd for the last four years, irregardless of price.

      Have a great weekend,
      Matt

  • avatar
    -Nate

    In general , American will always buy the biggest car they can afford .

    Every time we have a fuel price drop , land barges sell like hot cakes , they Never seem to learn .

    -Nate

    • 0 avatar
      hybridkiller

      While I agree that some people will gravitate back to less fuel efficient vehicles in the recent wake of lower gas prices, I think it’s a mistake to assume a significant trend – and here’s why:

      1. Many people are smart enough to know that gas prices will likely not remain at these levels for long.

      2. Many people see lower fuel costs as a de facto tax break, or as extra discretionary income. Their first instinct is usually to spend that money on non-transportation related items (or save it, pay off debt, etc.), not “gee, let me see if I can make that extra money go away”.

      3. Many people who have made the switch to a smaller, lighter vehicle find that they have actually gained a lot and sacrificed little – the inclination to go back to driving a truck is simply gone.

      4. It ain’t the ’90s anymore – SUVs are out, lighter and more efficient CUVs are in.

      • 0 avatar
        Lie2me

        In other words, we won’t be fooled again, at least I won’t

        • 0 avatar
          hybridkiller

          “In other words, we won’t GET fooled again, at least I won’t”

          As an old Who fan from way back, I had to ftfy.

          Are those guys still touring?

          • 0 avatar
            -Nate

            Who cares ? the CD-R’s are out there….

            I’m a Geezer (! GET OFF MY LAWN !) so I keep forgetting Millennials don’t consider Vehicular use like I do .

            I’ve been in The Auto Trade since I was in short pants and always, Americans bought the biggest car they could .

            Maybe things will change , I’ll wait & see .
            You alls usually have a clearer market view than I do anyways .

            -Nate

  • avatar
    DeadWeight

    I guarantee there will be a tsunami of very low mileage, 15 month to 33 month old (2013 to 2014 model year) large CUVs/SUVs/Trucks that are sold for bottom dollar at auction and at retail level channels in about 1 1/2 years from now (once gasoline spikes above $3 on a sustained basis again, which won’t take as long as many here forecast).

    • 0 avatar
      bball40dtw

      That proposition gets me excited. I will buy someone’s Expedition or Yukon, but I will not pay alot of money.

      • 0 avatar
        DeadWeight

        I am buying cheap econoboxes now and will trade them – on an even trade basis – for low mileage, 2012 to 2014 Escalades & Yukon Denalis when gas spikes beyond $3.89 a gallon again.

        • 0 avatar
          bball40dtw

          That’s what my C-Max is for.

          • 0 avatar
            Lie2me

            You going to trade your C-Max even for an Escalade when gas gets back to $4 a gallon?

          • 0 avatar
            bball40dtw

            I always say I’m going to get rid of the C-Max for something else, but it’s the best car I’ve ever owned. It’s extremely boring compared to my last two cars. Even being more boring, it’s a better daily driver than both. Even though I like the idea of owning a BoF full size SUV, I would probably grow tired of it even more quickly.

            If I’m going to be seriously tempted by something it will be a Mustang.

            I would never buy an Escalade. I want an Expedition King Ranch with some two tone action.

        • 0 avatar
          indi500fan

          Why waste time carrying the capital of all that iron on the books when you can play the futures market?

          • 0 avatar
            DeadWeight

            I’m not actually buying the cars, but exercising the right/guarantee to do so at a predetermined price, which costs me 1/55th of one cent on each dollar of per true present wholesale value.

            You should see the looks on the faces of those who bought a $80,000 Escalade in 2014 (with gasoline at an average of $2.09/gallon) when they learn that that same vehicle is being purchased for $27,300 in 2016 (with gasoline at an average of $3.89/gallon).

    • 0 avatar
      indi500fan

      If you have that rock solid insight on oil futures, don’t waste your time here, head to the commodities broker and make enough money to buy a fleet of exotics and never worry about fuel costs again!

      • 0 avatar
        -Nate

        Here in La La Land , those HUGE old BOF Suburbans sold like hot cakes to every market niche and were then sadly scrapped in droves when the fuel costs went North .

        I remember going into Pick-A-Part and seeing rows and rows of perfectly good Suburbans all nice and shiny , every one with a V-8 , few parts being taken off , they’d get dropped into the crusher 95 % complete , what a waste .

        I still see lots and lots of 454 V-8 powered 1970’s ~ 1989 GM trucks getting their engines yanked and dropped into the cast iron pile of brake rotors as NO ONE will pay $250 fan to flywheel for them , over on my old truck Forums , they’re always whining they can’t find them but when I post the exact location , not one ever buys one .

        Reality bites at times .

        -Nate

        • 0 avatar
          jrmason

          I’m guilty of cleaning up yards packed to the hilt with junk (or not so junk) cars, farm equipment, and anything else that rusted. It was a very lucrative buisiness in 07-10 with scrap prices peaking at nearly 300 a ton for a short period. I paid for much of my wifes 4 year degree through nursing school with my truck and 14k lb tilt trailer and a 10k lb winch mounted on the head ache rack. And a lot of ambition. After working 10-12 hour days at my regular job it was hard to find it, but it was better than the alternative which was going in debt up to my eyeballs.

        • 0 avatar
          bumpy ii

          Supply and demand. GM and Ford built something like 10 million BOF SUVs during the boom era. The cream puffs were sold at auction and exported, and the leftovers went to the scrap pile. One dirty secret of that era is that the domestics beggared their parts suppliers, so a lot of the fiddley bits tend to fail at or before 100k and replacement parts are expensive (by cheapskate standards). There is zero cachet in having a 15-year-old Tahoe or Explorer, so there is no incentive to keep them in good repair.

          • 0 avatar
            DenverMike

            The problem too, is they’re marooned here for all eternity. SUVs (BOF or not) cannot be imported into Mexico, unless they’re the magic 10_years_old. None older or newer accepted. So their value plummets faster than anything, except German cars.

  • avatar
    Joss

    Should think they’re over the moon at UPS & FedEx. Don’t count on a lower fuel surcharge just yet.. jet lag on aviation fuel costs – apparently.

    • 0 avatar
      DeadWeight

      Prices on things like shipping, groceries (use gasoline/diesel to get to store), building materials (shingles, asphalt, etc.) only rise when oil rises, but never fall when oil falls.

      It’s all very curious.

      • 0 avatar
        tekdemon

        It’s not really all that strange, large companies whose livelihood depend on energy supplies don’t just go and buy gas when they need it, they lock in billions of dollars worth of fuel for years at a time. Sometimes it helps them if they locked in a low price and then fuel prices go up but in this scenario most of these companies likely have contracts forcing them to pay the equivalent of $3+ a gallon of gas.

        See here for when Southwest “won” http://abcnews.go.com/Travel/story?id=5918252

      • 0 avatar
        hybridkiller

        Transportation costs are a significant, but not huge, portion of the retail price of goods. Fuel cost is only a portion of transportation costs. A ~25% move in fuel cost is a relatively small portion of a portion of a portion. Nothing curious about not seeing that reflected in retail prices.

        I’m not an expert on asphalt shingle manufacturing, but I’m guessing the cost of the petroleum component is miniscule vis-a-vis the retail price.

        • 0 avatar
          Toad

          “Transportation costs are a significant, but not huge, portion of the retail price of goods.”

          Yes and no. The transportation cost of an iPhone is very low; it is small and you can get many thousands of them in a shipping container. The cost of a cube of bricks used in building a house is very high; they are very heavy (and bulky) and can cost as nearly much to transport as to manufacture.

          For example, on a per mile basis transporting a can of soup (bulky, heavy) costs a lot more than a microchip (small, light); raising the cost of transportation 25% will make a measurable difference in the cost of the soup but virtually none in the cost of the microchip.

          • 0 avatar
            hybridkiller

            Let’s try this again. The retail price of your can of soup breaks down into cost of the product itself, employee salaries/wages/benefits, corporate income and property taxes, insurance, maintenance and depreciation on corporate infrastructure, energy/electricity costs, administrative costs, advertising, profit in the form of dividends to shareholders – oh yeah, and transportation of the product to market. I’ve probably left out some things, but hopefully you get the idea.
            And as I said, a 25% move either way in fuel cost DOES NOT equate to a 25% bump in total transportation cost – again, there are drivers and loaders to pay, maintenance/depreciation on trucks, insurance, administration, etc.

  • avatar
    Joss

    Hoots man! Scottish independence & North Sea Oil..

    We sell U.S. our saudi-kissing royal cringes & Apple can have BBC. We sold Rolls to Germany. So sell Cadillac to Iran.

  • avatar
    johnny ringo

    I’m sure at some time in the future the price of gasoline will rise again, but currently I’m enjoying the prices. Across the river from where I live regular unleaded is currently selling for $1.83 a gallon, filling my van only cast $13.15.

  • avatar
    Mr Imperial

    Disclaimer: Mr. Smith, my apologies for the below, as you are reporting on just real-world numbers and statistics

    Well, back when GW Bush was president, the high gas prices were all his fault, “making his oil buddies rich”, but now, the media reports how supply and demand laws affect prices??

    Wow, I thought the POTUS was the be-all/end-all…

  • avatar
    an innocent man

    Save 80 bil, kill the planet quicker. Seems a fair trade-off.

  • avatar
    -Nate

    .
    “NO YOU DID INT, NO YOU DID INT!!!!!

    Careful whatcha say ’round these parts, Nate.

    Prius is the holy grail of the EV/Hybrid Mafia. Not only are they thick as thieves, but inconspicuous, as well.

    They have no problem whatsoever smiting the nonbelievers.”
    Sure I did ~ those things are crap .

    Seriously , come with me and we’ll drive one in normal daily driver use and I defy anyone to say they like it ~ the rear 3/4 visibility is criminally bad , they’re not fast or overly good handling , comfortable , blah blah blah….

    I didn’t really pay attention to how badly the average prius driver is until my Brother nearly had a heart attack on the freeway , you’re right they are 90 + % of the left lane bandits these days .

    Sheesh .

    Good thing I got older & calmed down else I’d ‘ nerf ‘ them out of my way .

    Can’t drive like that anymore though =8-^ .

    -Nate

  • avatar
    -Nate

    “In CA gas went up 10 cents on JAN 1 for a new global warming state tax. ”

    Wrong again ~ I’ve been watching and the price actually DROPPED another 5 cents .

    It really irritates those of us who are TRUE CONSERVATIVES who know how to READ and UNDERSTAND things instead of foolishly parroting the sound bites of hate filled boobs like rush and hannity etc.

    For those who don’t actually live here , California is a rather Conservative place when you take a big view .

    Ignoramuses who wrap them selves in our flag then lie , rally piss off the Educated Folks .

    GAH ! I hate liberal idiots and false conservitards equally .

    GET OFF MY LAWN DAMMIT ! .

    =8-) .

    -Nate
    (get away from my Caddy too !)

    • 0 avatar
      hybridkiller

      “Ignoramuses who wrap them selves in our flag then lie , rally piss off the Educated Folks .

      GAH ! I hate liberal idiots and false conservitards equally.”

      This is precisely the kind of unintentional hypocrisy that gets you thrown under the bus along with the Limbaugh/Hannity crowd. Why use the political labels at all? Why not just say you hate ignorant, uneducated people regardless of political stripe?

      If your goal is to elevate reasonable, pragmatic conservatism then you’re not helping your cause by referring to liberals as idiots, even if you don’t mean all liberals.

      “For those who don’t actually live here , California is a rather Conservative place when you take a big view.”

      With Cali voter registration at 41% Democrat, 29% Republican, and 30% NPA in 2014, I’m not sure how you arrive at that conclusion.

      • 0 avatar
        -Nate

        Easy :

        By looking at who actually gets off their duffs and votes and who runs our Legislature .

        Stop trying to twist the truth to suit your agenda and try reality .

        -nate

        • 0 avatar
          hybridkiller

          Both houses of the California legislature are currently dominated by Democrats by nearly a 2 to 1 margin.

          Cali State Senate – 26 Democrats, 14 Republicans
          Cali State Assembly – 52 Democrats, 28 Republicans

          If you’re one of the “Educated Folks” then the conservative movement is in serious trouble.

  • avatar
    ceipower

    So much bickering going on here , I thought I was at the FOX NEWS website.

  • avatar
    Jeff S

    You are better off buying what you want and need and keeping it rather than just buying a vehicle based on the changing price of oil. If you want to stay out of debt and have any savings for retirement then keep what you have. Unless you drive much more than the average driver it takes years to pay for the additional savings in fuel versus the cost of a newer vehicle. If I were driving more than average then a Prius might be a good vehicle to drive, but just to buy a Prius to save on fuel for my less than average driving is a waste of money. The same holds true for buying a big fuel thirsty vehicle, which if I am not towing or hauling a lot of people or things is a waste of money regardless of how cheap fuel gets. Cheap fuel will not last as nothing lasts forever. If you buy what you need and want you are more likely to keep it for a while and you are more likely to take care of it if you like it.

  • avatar
    -Nate

    “Michael500,
    You may be here by accident – this is a website about cars. The Truth About Bigots is one aisle over, on the right. Far right.” .

    The interesting thing is : I’ve been spinning wrenches for almost 60 years now and pretty much every Shop I’ve ever worked in, from Gas Stations , to used Car Lots , Junk Yards , Indie Shops , Dealers , and Municipal Garages , all are mostly full of neo cons .

    I hired & trained a Woman @ my old VW Shop in the 1970’s , this went over really well with the College Students and Lesbians I had for Customers , not so much everyone else .

    In The Mayor’s Garage , they drummed the two Lesbian Mechanics we hired out fairly quickly ~ one was possibly competent but she made the usual Lesbian mistake of being incredibly hostile to everyone , all the time and so never really got the chance to make the cut . the other one seemed O.K. to me but still suffered terrible harassment daily and gave up and quit .

    All the Black Mechanics I have worked with , were extremely competent but had few friends amongst the White guys who never really bothered to ask ‘ hey , welcome , how you doin’ ? how’s your kids ? ‘ and the other daily topics .

    I have no problem being staunchly Conservative but I’m no whacko .

    O.K. , I’m a goofy guy but I’m also firmly rooted in reality unlike the average neo con who supports lying , thieving cowards like clive bundy etc.

    Until you live in The Ghetto and experience the daily racism that my teenaged Foster boys get , you really have no idea .

    Just taking them out for pizza last week was an exercise in patience for me .

    -Nate

  • avatar
    -Nate

    Redav Said : ” You can’t really call them Mexicans, though. During the time the territory of CA was under Mexican rule, their population there was small.” .
    .
    LOL ~ so true ! .

    If I say ‘ Hispanics , the Mexicans will rise up in anger , if I say ‘ Hispanics ‘ someone else will correct me…
    .
    I bet few here realize how many Centro- Americans live in every single corner of the U.S. of A. ! Guatemalans in Maine , there’s a whole lot of them .

    Salvadorians in Denver , on and on…

    -Nate

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