Karl on Cars

"why is the oil not flowing?"
 
Iraq made 70 Billion Dollars last year on Oil.
 
That is more that EXXON/MOBIL and all other oil companies

Just like brett just said the oil is flowing.

Let's deal with the topic and get away from the name-calling. Otherwise we'll be making this entry read-only.

"However, I don't believe (and I certainly could be wrong in my opinion) that the fuel economy of the vehicle was your overriding concern, so much as compared to the general value of the vehicle versus what you were paying or the general utility of the vehicle."
 
Just to confirm, yes, you're wrong. Gas mileage was the leading cause of why I bought my family sedan in 2005. I didn't like buying a lot of gas, even at $1.50 a gallon, and after having my 2002 Mini Cooper that barely eeked out 24 mpg (mostly cause it was slow and you had to floor it all the time, and the CVT sucked all the power -- and gas -- up) the idea of getting a larger, faster vehicle that averaged close to 30 mpg -- for $11k -- was too obvious to ignore. So I sold the Mini for $20,500 and walked away with $9,500 AND a better gas mileage car.
 
Of course it helps that I bought a car (the Mini Cooper) that held its value so well in the first place, but now we're back to the financial savvy topic...
 
"Hindsight, as they say, is 20/20. Sure, that person in an expensive SUV they bought 3 years ago should have bought a fuel efficient family sedan. But they can't go back in time and change their decision."
 
So instead they should sit around and whine about their bad decisions? Actually, that would still be acceptable. "Man, was I stupid, and I'm paying for it now." Instead most of these people say, "Damn George Bush! He's making my 11 mpg SUV really expensive to own!! And he's not paying my adjustable rate, interest-only home loan, either! Damn government! They are supposed to solve every problem I CREATE, and they aren't following through on this duty!!! Well, sure, I can't find where it says this in the Constitution or anything...but still!!!"

"Oil prices have affected my life in that the user posts on my favourite car website have become worse then CNN."
 
LOL! :)

This Talk Back Tuesday may have jumped the shark.

Yes, but there were WMDs hidden in the shark tank...or maybe there weren't...so that's okay.

It makes it a lot easier to go through several hundred replies when most of them go off topic, as I can just skim those to get to the ones that are anywhere near the topic.
 
And no offense Karl, I can sort of understand your bitchin about WHAT people are saying, but it DOES sounds extremely snobbish and elitist. When you get to drive one of a whole range of cars, basically for free, have your business pay for many of the expenses for your "dream car", and still make more than the average American, you can afford to sound that way. Most of the rest of us can't. Maybe that's why you seem so out of touch on this one. If our business maintained a range of vehicles from most classes (from ultra-compact to full-sized utility) that we could take out at need, we'd all probably choose the most fuel-efficient and inexpensive 'good deals' we could too. The blogs are great to illustrate this point- folks checking out the minivan, SUV, or truck for weekend chores, towing, going on long trips, etc. But most of the average Americans can't do that, and rentals still cost money, so many folks buy up a bit to get more capability from the one or two machines they have (based on their current income, the economy, cost of fuel, etc.), only to feel screwed when everything goes to hell at the same time. Go figure.
 
Sorry if I offend you much with these replies. I usually agree with you on most things (or only disagree on specific points), just not here.
 
Later.

I live 18 miles from my job. Three and a half years ago it cost me 10-12 dollars a week for my commute. Now, I pay 40-50 dollars a week. My pay has increased by 6% over the last 3 years. How does this not amount to a real increase in my cost of living? Adjustments for inflation aside, statistical analysis is one of the best ways to skew data. Do you make so much money that you are out of touch with the middle class cost of living? By the way, I have NO credit card debt, no car payment, and an 839 credit rating. What is your magic solution to this situation?

"Do you make so much money that you are out of touch with the middle class cost of living? By the way, I have NO credit card debt, no car payment, and an 839 credit rating. What is your magic solution to this situation?"
 
My guess is he would suggest you cut back on frivolous expenses (as he has done because he is too smart to buy an SUV, have a large mortgage, have debts, have a job that requires him to buy his own gas, etc.), trade in your gas guzzling midsize car and get a Smartcar or Yaris, start walking to work, etc. Remember, if you are complaining you are either stupid for buying a vehicle you cant afford even though gas was $1.50 when you made the purchase and/or you are a whiner who doesnt realize how cheap gas really is these days. Bottom line: if you arent down at the homeless shelter getting a free meal you must not be struggling and you should stop complaining.

Karl - not the right topic but I saw this in the Times today and you've talked about this silliness before:
 
http://www.nytimes.com/2008/05/01/science/earth/01climate.html?_r=1&scp=1&sq=In+a+New+Climate+Model%2C+Short-Term+Cooling+in+a+Warmer+World&st=nyt&oref=slogin
 
So, it's going to get cooler but that's still global warming. I wouldn't trust these people to give me the weekend forecast.

blueguydotcom-
 
I agree with your logic. I still fail to see how anyone with common sense cannot comprehend those simple statistics. I used that same example of milk earlier in this topic. Increases in fuel prices affect every aspect of life in the USA. Materials, consumables, foods and services all experience sudden jumps in prices directly synched with fuel fluctuations.
 
We're sending out RFPs and all of our vendors, suppliers and sub contractors are warning us that come July 1st, their prices are going to jump through the roof. People that live in the real world can see outside of their bubbles can appreciate what these fuel prices (including heating oil) are doing to the lives of the majority of citizens. My program used to serve 800 consumers a year. It was reduced to 750 in FY08 and will serve just 700 in FY09 due to the cost of materials as well as the . My program serves impoverished seniors who need kerosene heaters to stay warm during the cold months because oil was neared $3.50 a gallon during the winter. Again, I'll tell them to stop bitching.

"How does this not amount to a real increase in my cost of living?"
 
I need an exact location of where I said it WASN'T a cost of living increase.
 
Once again, lots of people ready to call me a cold, heartless, out-of-touch elitist, but few who want to answer the original question: How much does gas need to cost to fundamentally change people's lives (and, once again, bitching about it on a blog post doesn't count as a fundamental change). Remember folks, a key element in my original post relates to the RISE in smal SUV/CUV sales. I would submit most folks don't really need even that much vehicle, so if those sales are rising GAS PRICES STILL AREN'T AFFECTING A HIGH PERCENTAGE OF AMERICANS.
 
If you think your life has already changed fundamentally then tell me about it (some of you have, so thanks). If you've got nothing better to do than call me out-of-touch for making this observation...whatever.
 
BTW Jerry, your point seems to be that I have access to all these cars so I'm "snobbish and elitist." If that's true, wouldn't I have bought a really expensive gas guzzler, knowing that it's a car only my wife drives and I can justify it because "my" other cars and gas are free?
 
If I didn't have access to test cars I'd have still bought a fuel-efficient car. I thought I was getting that with the Mini -- I was wrong. So I made a switch to get it with the Chevy Malibu. I didn't go for brand name (often a "snobbish" practice), I didn't go for performance (another "elitist" move, though the Malibu's performance is pretty good considering its fuel mileage), I didn't go for more car than I genuinely need (yet another common frivolous move by Americans when car shopping -- in strong economic times with cheap gas). AND, I did this when gas was $1.50 a gallon because wasting money on gas is never a smart move, plus history suggested it was far more likely to go up than down in the future.
 
Could I own a much more expensive, fuel-INefficient and premium-branded car for my personal use, even in the current economic conditions? Absolutely. But even in my snobbish, elitist world I know that nothing is guaranteed, nothing lasts forever, and I try to plan accordingly. You'll note that in almost every vehicle review I post I talk about price/costs and if I think there's a more valuable alternative I mention it.
 
And before anyone throws the GT in my face, that car costs me less than $100 a month to insure, and at 16.5 mpg it's getting better mileage than a huge percentage of the cars on the road, plus it only gets driven about 5000 miles a year. Thus my (and/or Edmunds') ownership costs are no more than the what the average car in our long-term fleet costs. And the initial $160,000 price? Well, I had a feeling this car would hold it's value (though I didn't depend on it). And of course it has, so if things "go bad" in my world I can still get almost all of my money back whenever I need to. BTW, the money for the GT didn't come from my income, it came from some property investments -- investments that started when I was making $39,000 a year. And in terms of "value" the car was cheaper than the equivalent Ferrari/Lamborghini while offering superior performance (and looks IMHO) so -- in that market segment/price point it was clearly the value leader, too.
 
"But most of the average Americans can't do that, and rentals still cost money, so many folks buy up a bit to get more capability from the one or two machines they have (based on their current income, the economy, cost of fuel, etc.), only to feel screwed when everything goes to hell at the same time. Go figure."
 
Sorry Jerry, I can't figure it. People who don't think and/or plan ahead and/or make clearly bad decisions, and then claim they got "screwed" when circumstances changed, are a mystery to me. Personal responsibility is a cornerstone of my existence, so I have no understanding of people who don't practice it (though I know many of them refuse to acknowledge their bad decisions, and are much more likely to claim "victim of circumstances" status when "everything goes to hell" -- and/or they call people who haven't made bad decisions "out of touch").
 
The scariest part? I don't consider myself some kind of monetary wiz in the least. This is all pretty common sense stuff. Though Voltaire once said, "Common sense is not so common..."
 
Maybe I should start a financial planning blog.

I know what you mean Karl. When I first moved here 3 years ago, all my buddies bought the biggest house their loan officers would allow because it was a booming economy. But I did the research and discovered that the average house value was actually far lower than the $200K upscale homes they were buying. With the bell curve around $140K and income levels remaining stagnant, I felt a better investment would be made below the $140K mark. I haven't sold yet (got 1 year left) so I should count my chickens, but the value of my home has skyrocketed 25-35% whereas my buds have seen values increase a meagre 5-10%. I didn't foresee a bubble bust coming, I just knew there were far more shoppers in my price range than theirs.

^Karl, I read tons of forums and blogs, you'd be amazed at the short sigthedness of people in america. The number of peolpe that 'want' a new car, but are upside down 7k in the current car, how can they get another one.
 
Those people today are hurting, and are stuck.
 
The vast majority of readers here are smarter. And as such for us there hasn't been a 'fundemental' difference in our lives.
 
But plans for the future are changing. Like I said before, I consided getting a mspd3, it would fuel my want of speed, can be found for not alot of cash, and fill all my needs as a car... And I planned on 4dollar gas. But while doing the reasearch, i laid outspread sheets, and for the most part gas prices played a minior role in the final cost after 5 years.
 
However I added a mini to the list. and since its mpgs was significatly higher the other cars. I could buy a 25k mini, vs a 21k mspd and it would be a wash.
 
So I had a fundemantel shift in my car rankings, with gas costs rising to the top of the list.
 
The other reason for this is, that it looks like the china and inida growth are going to change the price of oil for good now (and in a bad way) so thinking 5 yrs our, 6+ dollars a gallon seems very likely.
 
Still waiting to see what the new jetta tdi will really do. if its between 40-50mpg. Might just get that.

Buying the most expensive anything you can afford (car, house, even TV or computer) is rarely a good idea. Those things are the first to slide in a down economy and the last to rise in a recovering economy. They also take the biggest depreciation hits in the shortest time. IF (capitalized on purpose) you can afford those "extras" and really want the additional benefits (which are rarely, if ever, proportional to the additional costs, BTW) then fine. But if you just gotta have the best, price and your own personal economic stability be damned, then you kind of deserve whatever happens...

Karl,
 
To answer your question: Yes.
 
Gas prices have fundamentally altered how we do things. We have changed how we drive/shop related to gas prices. We walk to the market quite often or when we must drive we try to create a plan so as to achieve maximum efficiency. And we take the Mini more than the A3 as I'm getting over 30 MPG compared to her 25-26 MPG.
 
We're both interested in the TDI's coming from VW as 45 mpg would offer a huge boost (premium is $4.05 v diesel at $4.39).
 
Oh and we're not exactly average - 25% savings rate, graduate degrees, we own 4 homes, 3 are profitable rentals, the other is our modest place with a low mortgage (even by national standards). We don't need to save on gas but want to, much like we divide recyclables and try to avoid wasteful buying of luxury goods. I admit with cars we fall down but we figure we spend 3 hours a day in our cars combined, at least, so having something enjoyable and newer is our big extravagance.

The current price of gasoline has affected my family’s behavior and I can cite one extreme change that a co-worker made.
 
I really don’t know to what extent one would consider a change to lifestyle “fundamental”, but when peoples behavior is being modified I think the price effect has moved beyond mere complaining.
 
The changes that we have made are the typical ones:
 
• We almost always choose the more fuel efficient car when we can for any type of trip. And we aggregate more trips.
• I don’t speed as much. After doing some calculations driving at 65 mph instead of 85 mph costs me a grand total of 5 minutes on my longer commute, and that difference can easily be wiped out by hitting lights the wrong/right way once I’m off the highway. I know this is an obvious step, that doesn’t seem like much, but slowing down really goes against some ingrained habits akin to quitting smoking or cutting out carbs. (I guess I will have to see how long I can go without binging on the accelerator pedal.)
• We are not at the point where we will be trading in any cars, (we drive fairly fuel efficient vehicles now) but the next round of purchases, fuel efficiency will play a much higher factor than now, to the point where we would seriously entertain hybrids or diesels (where they provided a significant mileage advantage).
 
Some of the areas where we are really feeling the indirect effect of the fuel prices are in the quotes I am getting for repairing/replacing our driveway, grocery bills about 25% higher (causing me to pay much closer attention to coupons, etc.), and some creative booking of airfare. For this summer’s vacation, it has caused to fly in and out of two different airports in search of cheaper fares, and one member of the family has extended a stay to get the cheaper fares. (I know there are other factors beyond fuel costs in airfare changes, but the cost of fuel is a biggie.)
 
My co-worker has done something drastic. He has had his Jetta TDI modified with a greasecar kit and arranged with local restaurants to burn their used frying oil. I suspect he partially did this because it was cool, but the diesel runups did push him to take the leap of faith and have the kit installed, and sell the idea to his wife. (Her saying yes, WAS a fundamental change.
 
BTW – Karl mentioned about increases in DSL and cable/satellite costs. I think the day when people complain about fuel more than the cost of cable, will be a sure sign of a fundamental change in the way Americans are effected by these costs.

Sorry for the constant postings, but I've got some real world numbers for you, Karl. I was scrounging around my oil change paperwork and discovered some surprising information.
 
In 2005 I drove my car ~13,400 miles (36K).
In 2006 I drove my car ~11,200 miles (48K).
In 2007 I drove my car ~4,100 miles (52K).
 
I guess I really have been changing my lifestyle.

Wow, there's a lot going on above me.
 
In regards to Karl's very first question, I seriously doubt that gas costs enough right now to make an immediate impact. Over the long (1 year +) run, we might have a slow shift away from truck based SUVs (as has been happening), but if gas stays below $4, I doubt the average consumer will make too much of a lifestyle change (ex. go out and buy a smaller car, buy the I4 over the V6 if they can afford it). The average pubic simply doesn't have the attention span to remember what they were bitching about 3 weeks ago.
 
As for how much gas and prices in general have gone up, Karl alluded to that with his graph, but here's a better breakdown of inflation: http://www.bls.gov/news.release/cpi.nr0.htm
That's from the Department of Labor, scroll down to Table A and look at the column "Unadjusted 12. Mos. Ended Mar. 2008." That's the inflation from March of 2007 to the end of March 2008. Overall inflation was 4.0%, slightly high for our economy (though that's a long way from panic mode). However, Transportation increased 8.2% (that includes gasoline) and energy in general increased 17.0% (that's pretty darn high). Food only went up 4.5% though, so at least at this point, all of the complaining about food prices being forced insanely higher by energy prices is unfounded (not to say that it won't inflate more, as it takes a little while for price increases on the supplier end to make their way to consumers).
 
For anyone curious, the CPI (consumer price index) measures inflation by monitoring the prices of various goods over time and calculating the percentage of one's household income that the particular good goes to.
 
I also present to you total inflation over the last 10 years:
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CUUR0000SA0&output_view=pct_12mths
 
4.0% inflation is certainly at the high end of that scale, but it's not unheard of and probably has more to do with stupidly lax credit policies from the FED and a run-up in home prices caused by stupid people not reading loan paperwork than energy prices.
 
I find the best way to talk about price increases is to look at numbers, not semantics. Because even though prices in some areas have increased (fuel prices), prices in other areas have remained either stagnant (Recreation) or actually decreased (apparel). Without food or energy, overall inflation was a low 2.4%, so while food and energy prices are stoking inflation, the big picture (when you look at everything you send money on) isn't nearly as bad.