AutoNation: Gas Price `Freak-Out Number' Higher Than 2008

Probably depends on what region of the nation your in. In the south that price would almost make someone go postal.

 

He is absolutely wrong. If he thinks people will just shrug at $4 and continue to blast truck sales into the stratosphere he's delusional.

"freak out" is hardly a qualitative term so it's impossible to define what is a situation of the public freaking out or not. But, if gas prices hit where they were in 2008 it will, as it did in 2008, absolutely change vehicle purchase behavior.

 

I have been wondering what that magical number will be when people start talking about it again. I think it will take atleast the $4.00 mark before we start seeing behavior change. I guess time will tell, sice gas will be hitting $4.00 soon.

 

First some need trucks, and many want trucks. They have gotten much more efficient in the last decade. C4C had many trading them in on cameries and focuses. I believe the current growth is really rtm, but it is a new lower mean. Many that were going to buy better mileage already did. I totaled my lex and bought a brand new prius in November of '09. My old car had milage much too good for c4c, but the new one is significantly less thirsty in the city. So the government incentives and recent purchases have raised the price where people act differently.

Completely agree here. I think the behavior has already changed. Cafe requirements also will change behavior in 5 years, so the ship of big trucks and SUVs favored by government rules is fading.

I think $3.50 for talk. What we are here. It all depends what happens in egypt. Will we have regime change and will it spread. If we have change will it be like iran in 1979, or eastern europe when the soviet union collapsed?

We live in exciting times.

 

We're at $3.20 now and nobody is talking much about it. SUV sales are still climbing. I would think it would need to get well above $3.50 before people start giving it a lot of attention. At $4 it will be all over Fox News I would imagine.

Historically light-duty trucks were about 20% of all passenger vehicle sales - what was needed for farmers and contractors, etc.
Now it's about 50%, because SUVs have been included, and they weren't part of the main CAFE requirements (up till now). So there's a lot of room yet for people to migrate away from SUVs and pickup trucks. Looks like cross-overs will take a lot of that market from the SUVs and mini-vans. Hopefully the Prius v will be a big part of that trend.

 

If crapton is a word, I'd use it. I will anyway. The roads are still rife with SUVs. Even the smaller crossovers or crossutes or whatever the hell they are called these days get generally quite bad mileage.

Given that a minivan can trounce an SUV in both mileage and utility (not including towing, though), it's clear that many are still buying luxury over function, but gas prices will encourage change, should they go up. I try not to predict much about gas prices because it's difficult for anybody to.

I don't think we're hitting $4.50 any time soon, not including the chance of any temporary blips from speculators. It's pretty obvious that "elevated" gas prices are here to stay, though. 10 years ago I paid $.97 for a gallon of 87. That will never happen again, even $2 is a pipe dream. Those days are done and will not return.

 

I think the premise of the article is correct. I equate it to pain.

As you get hurt more and more you build a threshold. It takes more pain to really hurt someone with the tolerance than someone without (like me!). So when gas prices jumped pretty much overnight to high levels people were really hurting and panicking. Now that they've been through it, and gas has been going up steadily, it is more like a dull pain that you cant make go away but live with rather than a knife through your spleen. I put in 7 gallons today at $2.959. I got there after a truck and left before. I could see him do one of those glance overs at my pump screen as I left and he was still pumping from my rearview mirror.

And the argument that "some need trucks" is bologna. Tell that to the rest of the developed world where somehow a stationwagon can do 99% of what they need and they rent (or get something delivered) when it can't.

 

Hallelujah!

I've tried to discuss this before and have always been shot down. We manage over here perfectly well without massive pickups but still manage to tow horses and boats or take monthly trips to the supermarket. Have a king size horse trailer and you need a king size truck - have a horse sized trailer and get along find with a smaller SUV or normal car.

 

The rest of the world is too poor for trucks (much of it), though. They do without huge tvs also, but I want to keep mine I would say a lot of guys with a truck use it for some period of time for its use, it seems less of an image purchase than an SUV, which in really almost all ways most people use them is inferior to a minivan. But it doesn't have the stigma.

2k1toaster, another way to think of this is slow boiling a frog. The rise in 2008 was meteoric and now it's slow so we just ignore it. I'm paying almost $3.30 now but I can't deny I don't pay much attention, partly because of the slow boil and partly because my gas bill has plummeted

 

But its "use" is useless. Similar vehicles can do similar things. And even if I were to accept that the US is the only 1st world country, that implies that utility increases with wealth. If Bill Gate's had horses, they would friggin' gigantic I suppose. Likewise I hear the Nigerian miniature pony is quite a sight. Be careful where you step!

I like this.

 

I really tried to use a prius everyday for work but in the end I went back to my extended cab 4x4
The 4x4 does come in handy on the job site since they are never plowed
And today the fill up was at $1.059 / litre

 

Yeah we have 4x4 trucks here for people who need to drive over plowed fields. Thing is, they have 2 or 3 litre diesel engines not a 5 or 6 litre petrol or diesel, yet can still tow or carry everything a farmer or engineer needs.


@skoorbmax, I hope you were joking about the rest of the world being too poor for trucks and how they do without large screen tv's. That might have been true 20 years ago but trucks and large screen tv's are popular everywhere - Europe, India and China. The trucks just happen to be much more economical

 

Partially joking I bet if gas was as cheap in Europe as it has been over here you'd see more people in huge vehicles...

 

There are no small diesel trucks in NA
And mileage between a 6 and 8 cylinder truck is about the same
I guess you have never driven throw 2 feet of snow in a parking lot

 

In the USA, you can not normally buy a 1/4 ton pickup truck with a diesel engine. For that you need to go up to 1/2 or 3/4 ton pickup (read: much more expensive). Upgrading to a diesel engine increases the price by a few thousand to $10,000. You'd probably have to get dual rear wheels too. If you have a 3/4-ton diesel dually, you can haul 15,000 - 25,000 lbs, or carry 5,000 - 8,000 lb in the bed.

The thing is people here in the US with trucks, who use them as they are intended (to haul stuff), expect to drive fully loaded at reasonable highway speeds (60 mph with a trailer, 65mph w/o). They need to accelerate at a reasonable speed to merge into traffic. I don't know a 2 liter diesel would do it. A 3.5 liter would work pretty well.

Even with a 5.4 or 5.7 liter gas engine, you can get something like 18 mpg hwy. Don't forget that the diesels are turbocharged, while most pickup truck gas engines are not.

Ford's new F-150 4x2 Eco Boost 3.5 L V6 engine is turbocharged and matches the performance of a 5.7 liter engine while offering 22mpg highway, and can tow over 11,000 lb.

People here really like their V8's and large engine displacements though.

 

I agree wholeheartedly. The pain threshhold analogy is apropos. It's a 'pain' in the pocket or budget. I think that we were subjected to a dose of 'budgetary pain' in 2008 to see where the threshhold or 'freak-out-price' was. For most of the country it was $4.25, for some it went as high as $5.00 iirc. But we lived through it.

So now we know that $4.00+ for fuel is survivable. With many more of us driving more fuel efficient vehicles I think that the 'pain threshhold' goes to $4.50 or even $5.00 on average as Michael Jackson noted.

Here's another thought to consider / discuss.

Unless there is another economic collapse like in 2008....we will never see $2.50 gasoline again in our lifetimes....ever.

Right now where we are - at about $3.05 per gallon on average - this will be the low point for the next decade, i.e. well into the '20s. I also think that we'll normally run in the $3 - $6 per gallon range all this decade with spikes as high as $8 or $10 depending on political and economic forces.

 

No Joke. take a look at what many Europeans transplants and ex-pats buy when they start working or living in the USA. It you guessed a big American Car or SUV, you guessed correctly.

As for the freak out price - I suspect that gas will need to get quite expensive to chance Americans behavior significantly. Even at $5 a gallon, there will still be plenty of buyers for large cars, SUV's, and sports cars. Now if we start having gas shortages (i.e., gas lines) - it's a whole new ballgame. A car that you don't have to fill up very often - such as a Prius or a Plug in Prius - might become very appealing - not for the higher mileage - but just to save you the extra trips to the pump.

 

I remember in March of 2008, I was kind of interested in getting a Honda Ridgeline as a do-it-all vehicle ....

until I talked to a Ridgeline owner at a gas station ...

'how do you like your Ridgeline?'

'Oh, right not, not so well, I just pumped in $70 of gas after going 300 miles on the tank'.....

At that moment, I decided I did not want a Ridgeline or any vehicle that gets 17 MPG.

I'm at 202 miles into this tank in Accord, and it's still showing good bit over 1/2 tank. Should be very high 20's. I decided to ride my bicycle on 5 minute drives weather permitting. Will use Accord when appropriate.

 

Lot of stuff to read out there, but here's a start...
http://www.marketoracle.co.uk/Article24849.html

http://www.eia.doe.gov/oiaf/forecasting.html