[SD_Scott]

$this->bbcode_second_pass_quote('aflurry', 'W')hen the ARM adjusts it'll be quite a bit nicer living in an SUV than a Honda Insight.

[JoeW]

$this->bbcode_second_pass_quote('emersonbiggins', '
')
Do you not understand what being 'upside down' in a loan means? When these people who recently bought "employee discount" SUVs roll back into the dealers in a couple of years, they're going to be in for a hell of a surprise when they find out that they're 10 or 15-thousand "upside down" on that vehicle. This means that they will OWE 10 or 15k MORE than the car is WORTH. With this kind of debt, most will just trudge on and continue to try to pay just for putting gas into these beasts. If you do get a new car loan at that point, you'll be rolling your SUV debt into your payment, essentially paying that 10-15 thousand + whatever the new car costs, making that 'smart' car not seem like such a bargain, either.

[emersonbiggins]

$this->bbcode_second_pass_quote('JoeW', '')$this->bbcode_second_pass_quote('emersonbiggins', '
')
Do you not understand what being 'upside down' in a loan means? When these people who recently bought "employee discount" SUVs roll back into the dealers in a couple of years, they're going to be in for a hell of a surprise when they find out that they're 10 or 15-thousand "upside down" on that vehicle. This means that they will OWE 10 or 15k MORE than the car is WORTH. With this kind of debt, most will just trudge on and continue to try to pay just for putting gas into these beasts. If you do get a new car loan at that point, you'll be rolling your SUV debt into your payment, essentially paying that 10-15 thousand + whatever the new car costs, making that 'smart' car not seem like such a bargain, either.

[Backtosteam]

$this->bbcode_second_pass_quote('JoeW', 'T')hese companies are doing what is in their best interests: Unload the gas-guzzling inventory while they can to a public dumb enough to buy it!

[Heineken]

deleted

[Heineken]

Forget the car companies. I'm talking about the CONSUMERS, who are what principally govern the economy. The point of this forum is, I thought, to discuss how consumers have driven themselves into a corner with their orgy of giant-SUV buying. Replacing a fleet of---what, 100 million??---U.S. SUVs and monster pickups isn't going to be simple matter of waltzing down to the showroom and trading in for a hybrid. Given consumers' indebtedness and the cost to the nation (and the world) of replacing such a fleet, there will be a massive economic fallout.

[FoxV]

I don't know I think Pup' has the correct sentiment.

These automakers are all on the verge of collapse and they've just pissed out their inventories with little or no profit (maybe even at a loss).

So what is going to happen in the fall when:
A) after record sales they report no profit growth, or even profit declines
B) Totally dead sales after the discounts are over
C) Oil prices approach their yearly maximum point (nope we're not there yet)

add to this rising foreclosure claims, homebuilding and mortgage stocks sliding, and coperate profits being erroded by energy prices (not to mention shipping companies being brutalized by gas prices).

Man what a mix of disasters. The Q3 report deadline is going to play out like a horror movie this September

[spudbuddy]

I suppose North America is the only place in the world that has a problem of this magnitude.
(China has its own particular lovely set of impending dooms)
but as mentioned:
Japanese and European automakers have been addressing this issue for 3 decades (and their gas prices reflect this...including all the accompanying taxes)
It's easy to sit back and decide that every SUV driver is a total moron who doesn't give a shit and has his or her head stuck in the sand.
Once consumers en masse....become aware that the price at the pump is not just a reflection of our Iraq adventure (and that unlike post-1979) prices are highly unlikely to come down again, or even stabilize...then a consumer bandwagon will produce a veritable blizzard of change.
(When people demand 60mpg...manufacturers will fall all over themselves to supply it.)
It's too damned bad (God knows who was talking about this even a decade ago) that most of us got caught with our pants down.
However...you must remember, only 2 and a half years ago prices were pretty stable.
Prices came down after the first Gulf war, and most people expected the same this time.
I wonder what kind of political and advertising/marketing rhetoric will be blathered about in the coming months...but it's a moot point.
People tend to be educated by their wallets, anyhow.

I still believe that SUV's became popular in the first place, because of the driving conditions in North America. (congestion, excessive speed, blazing crazed 18-wheelers trying to make up time.)
People just felt safer in them.

My father pointed out a long time ago:

In the 1950's the average family sedan was a big, solid, lumbering vehicle. It lurched around for the most part, and had to be driven methodically.
You couldn't "zip" and "zing" in them. You just drove. (Anyone who ever drove one would know this.)
The only thing on the road that didn't drive this way, was a sports car. And there were far fewer of them, proportionately. And they were driven with greater care, because they were surrounded by big vehicles.
Now...everything on the road drives like a sports car, and is driven like one.
Hence...the popular public response to the (relative) safety that an SUV represents. On that issue alone, I can't blame people for preferring them. This means that until now, they were prepared to pay more for fuel, and consider it the cost of safe motoring.
If you understand traffic patterns and driving habits...you have to add to all this the equation that many people are time-stressed to the max. Not only are they working longer hours, but if they live somewhere where every single thing they and their kids do requires a car trip, then they are constantly in the position of trying to make up time on the road.
Yeah, it's stupid and definitely a no-win situation, but this is what we've been doing for a long time now.

The first time through this, what we had was early-70's muscle cars.
What we also had was an economy far less resistant to change. (read: an immediate downscaling and reduction of speed limits).
This requires legislation of course. Hats off to Washington and Ottawa for moving with the speed of a gerbil dogsled!
For about a year now, I've been wondering why SUV's are still even street-legal.
Anyhow, when they're gone, and when 18-wheelers are all replaced by rail freight, highways will be a lot more comfortable to drive smaller vehicles on, and at a slower speed.
That's a big change. It won't happen overnight. But it will happen.

[killJOY]

$this->bbcode_second_pass_quote('', ' ')Are we crazy or what?

[emersonbiggins]

I share your hope that we will downsize our vehicles to something that makes more sense, and (criminy) we will actually start investing in a veritable nationwide rail network to replace the frivolity of our current airline and trucking networks. It will take major capital investment to make it happen, but didn't we just commit to a $286B highway overhaul?

[JoeW]

$this->bbcode_second_pass_quote('emersonbiggins', '
')Your first post seemed myopic. Thus the tone.
BTW, America, by and large, doesn't pay 'cash' for its cars. Many people are already on the 'hyperloan' (60-72 months), so rolling debt into a new vehicle will undoubtedly increase their monthly payment. It is true they would save money on gas vs. their old SUV, but the savings would go to increased gas prices, the outcome is a wash. We've already demonstrated that people would rather save money 'now' than save it 'later'.

[Colorado-Valley]

I bought a slightly used Kawasaki 125 cruiser bike on ebay the other day that gets about 90 miles per gallon.

And it's kind of fun to ride, actually.

The idea of buying a new SUV mega-truck just because they're on sale seems like confirmation that there are too many idiots in this country.

[Heineken]

I think you're underestimating how "played out" the average American consumer is, JoeW. Millions of them are literally living from paycheck to paycheck and have no net assets---just home debt and auto debt and credit-card debt. I don't question that small cars offer greater economy and might partially offset the trade-in loss of Americans' suddenly worthless giant SUVs, but to get from A to B you have to have a massive discontinuity manifested in bankruptcies, unemployment, and other pain.--in other words, a recession or depression, perhaps even a revolution. The fleet of 100 million or so giant guzzlers is in place; I submit that segueing to a lean fleet of scaled-down gas sippers isn't going to be easy. In fact, that transformation will in itself require enough crude to float a thousand tankers.

[Heineken]

$this->bbcode_second_pass_quote('Colorado-Valley', 'I') bought a slightly used Kawasaki 125 cruiser bike on ebay the other day that gets about 90 miles per gallon.

And it's kind of fun to ride, actually.

[emersonbiggins]

JoeW, your scenario might work, but not within the context of the larger economy. Will it work when high gas prices are affecting every other aspect of the economy? There's no way to bring goods on the scale we have today without trucks (barring a massive implementation of rail), and they will have a major impact on the cost of goods in general. If these goods go unpurchased because millions are buying hybrids + $4 gasoline, our economy tanks. But, $4 gasoline will tank us, hybrids or not. Plain and simple.

Another thing that is going unnoticed is that while the Big Three are cleaning inventory at a rapid clip due to the 'employee discount', they're barely clearing a profit, if at all. Why should we believe that they have the capital (or anybody, for that matter) for a massive R&D team to 'invent' these fuel-efficient vehicles. Frankly, if they are banking on it, I don't see it happening in time to solve anything. The Japanese & Europeans are way ahead of the curve on this one.

[FairMaiden]

I asked many ppl this question and I get the same answer: the government will never let oil prices get that high. Seems they have faith in their govts.

I work as a sustainable transportation consultant so I know all about this issue. I make cheaper, more convienment and fun to use transit, walk, cycle, carpool, etc...and still ppl say, "I love my car." Its a love affair and they say love is blind. These ppl are blind to the reality that oil is running out.

[Heineken]

deleted

[Heineken]

$this->bbcode_second_pass_quote('FairMaiden', 'I') asked many ppl this question and I get the same answer: the government will never let oil prices get that high. Seems they have faith in their govts.

[JoeW]

$this->bbcode_second_pass_quote('Heineken', 'I') think you're underestimating how "played out" the average American consumer is, JoeW. Millions of them are literally living from paycheck to paycheck and have no net assets---just home debt and auto debt and credit-card debt. I don't question that small cars offer greater economy and might partially offset the trade-in loss of Americans' suddenly worthless giant SUVs, but to get from A to B you have to have a massive discontinuity manifested in bankruptcies, unemployment, and other pain.--in other words, a recession or depression, perhaps even a revolution. The fleet of 100 million or so giant guzzlers is in place; I submit that segueing to a lean fleet of scaled-down gas sippers isn't going to be easy. In fact, that transformation will in itself require enough crude to float a thousand tankers.