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This topic comprises 6 pages: 1 2 3 4 5 6
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Topic: Gas prices and Stupid people!
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 04-26-2006 05:30 PM
That was widely pointed out here when the Chancellor (effectively the no. 2 in the UK government) announced that he was going to become the world's biggest tree hugger, by increasing the road tax on the highest Co2 emissions vehicles by about £50. If someone can afford to buy a 4x4/SUV costing £30k, and then pay the £5k or so a year it costs to run in maintenance, depreciation and insurance, then an extra £50 is hardly going to have them beating down the doors of their nearest Prius dealership.
Related to which, I suspect that our government is very happy to sit back and do nothing while the petrol price busts the £1/litre mark and keeps going. If they overtly tax us out of big-engined cars then they'll be condemned by the right-of-centre as a Big Brother, politically correct dictatorship. But they stand aside and let market forces do the job for them, they can blame the Chinese, Ahmedinejad (sp?) and SUV owners, while achieving the same end result.
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 04-27-2006 01:36 AM
quote: Monte L Fullmer
..why you see so many vehicles this size in the used car lot - vehicles that people either couldn't afford anymore due to bankruptcy situations or repossession, or turned in when the lease expired.
By the same token, medium-sized hatchbacks command much higher used prices than large saloons. After 3 years/60k miles or so, the initial depreciation has gone on both categories: the difference is that a Mondeo will cost significantly more to run in fuel, maintenance and insurance than a Focus.
When I last changed my car 2 1/2 years ago, a four year-old Mondeo with 95k miles on the clock was going for around the same price as an 8 year-old Golf with 130k ish. I cheated the system a bit by getting the Mondeo and then having an LPG tank put in it, thereby enabling me to buy fuel at a much lower tax rate. But that's only really cost-effective if you do more than 20k miles a year, which most drivers in Britain don't (the average per vehicle is 12k). And I still get hit with higher bills for things like tyres, brake discs, shock absorbers - basically, all the usual stuff that wears out and needs replacing once a car gets to that sort of age. I suspect that's another reason why the used car price of larger saloons is low - a lot of people (especially fleet managers) buy them new and plan on getting rid of them just when they reach the mileage at which big ticket items start to need replacing.
If the cost of fuel stays around these levels long-term, I guess that will put downward pressure on the used price of SUVs, too. As others have pointed out, it's never going to have a massive and immediate effect on the way we live our lives unless it gets to stratospheric levels ($12 a gallon as Chris worked it out, which would equate to around £4.50 a litre here). For example, my car-related outgoings for 2005 were £3,206 (yes, I know, I use Microsoft Money and that's sad), of which fuel accounted for £884. The rest of that was maintenance, insurance, breakdown cover and rent on the garage. And that total figure is just outgoings - it doesn't include depreciation. Given that my car has so many miles on it by now, I'd guess that the depreciation figure isn't really significant in my case any more.
At a very rough guess, I'd speculate that a typical Brit running a 1.8 Focus or Golf which is 2-3 years old and does 12k miles a year probably pays around £4k in total (including depreciation), of which less than a quarter of that is fuel. The price of that fuel, therefore, is really going to have to skyrocket before there are going to be any immediate and dramatic effects. The impact will be a slow drip-drip-drip, especially as the extra money people are spending on fuel is pulled out of other sectors of the economy.
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