[FairMaiden]

The even more interesting thing is - my coworkers are transportation environmentalist and THEY dont' even believe in peak oil. Well, they kind of do - how can you miss it when you have to read all the articles for your job? But they believe in a "soft landing" - that it will be a blip in the economy that corrects itself with fuel efficient transportation and other fuel sources. That may happen but I doubt it will happen in time. Unless they have discovered cold fusion and are just biding their time...I'm an optimist yet not that optimistic...

[Heineken]

$this->bbcode_second_pass_quote('JoeW', '
')
The played out consumers will be the first ones to make the trade-in. They absolutely must get to work to pay their bills and when the fuel bill becomes too much of a burden, they will dump the guzzler. It's a no-brainer.
As far as getting from here to $4/gal gas, I don't think that the apocalypse is going to somehow happen between now and then. People thought that $2/gal gas would destroy the economy, but it hasn't yet. Now we're testing out $2.50 and $3.00.
Despair for humanity if you must! But do not despair for the automakers over the next five years. I'm sure they will figure out how to make money in this environment.

[JeeBoomba]

$this->bbcode_second_pass_quote('Heineken', 'W')ho will be paying for all those millions of new cars, Joe? The printing presses? I just made the point that consumers are already up to their eyeballs in debt.

[I_Like_Plants]

Any decent Saturn dealer has a Saturn on the floor with various body panels cut away, so you can see the recycled plastic that goes into one, pretty cool.

Yep get down to the cheap go-kart idea and you can do a lot with a little, in fact there's a thing called a crank-it or something that's something like a 4-wheeled mountain bike, pedal-powered, that would be my first choice for the basic framework for a DARPA Challenge entry. (Robot-car that can drive itself and do the old Barstow-Vegas overland route using GPS and some intelligence.)

[emersonbiggins]

$this->bbcode_second_pass_quote('JoeW', '
')As far as getting from here to $4/gal gas, I don't think that the apocalypse is going to somehow happen between now and then. People thought that $2/gal gas would destroy the economy, but it hasn't yet. Now we're testing out $2.50 and $3.00.

[dgacioch]

Well, living here in detroit i can tell ya that most of the autoworkers i personally know are happy as hell that all the big 3 offered those incentives. Things are not going well as inventory is simply not moving without rebate checks and incentives. Its easy for us to criticize the consumer about getting into a massive suv now, but the public has not been educated enough about peak oil to make an informed choice regarding vehicle choice. Yes, the average guy sees gas going up, but gas has spiked before and has always retreated back down. Reality has not set in yet that this time may be different. Even here though, in the heart of the motorcity ive seen small changes in the last year. In a town where almost no one used to drive foreign cars, i see a lot more hondas and toyotas on the road then i ever have before. The streets arent exactly packed with bicycles, but i see way more of them this year than i ever have before (and i notice, ive been biking to work for 4 years now.) Prior to the employee price for everyone, Big 3 lots displayed long rows of full size trucks and suv's prominantly in the front rows with big SALE stickers plastered all over them. Employee pricing was an act of desperation. As gas approachs the 2.75 mark here in the states, look for employee pricing or other massive rebates to continue to try and move inventory as all of the big three are woefully unprepared to offer the consumer an alternative to asia automakers. What we saw this summer, is americans are still too blinded by a big sale to think of the after effects. Hey, i saved 9 grand on the truck, so what if i pay a little more for gas. Reality will hit later, when filling it up becomes a chore, and it sits in the drive while families drive their "second car" usually a small econobox that was intended as the backup vehicle.

My mom retired from GM, my grandfather from Ford, my dad made auto glass at guardian, and ive got tons of relatives and friends who make their livings and pensions from the big three and im so sad to see whats happened to our car companies. It hit me last week when I was getting some info on trying to get out of my lease on my jeep (i got into it before i became informed) and I looked at every one of the big three automakers to see what they offered that could meet my criteria in the face of rising fuel prices. Seats 5, under 16k pricing, and over 30mpg city driving. The only vehicles that met that criteria were the honda civic and toyota corrolla. The only gm vehicle that came close was the pontiac vibe which is really only a rebadged toyota matrix. On the ford and chrysler side, theres absolutely nada. The cars i thought would be rated high were quite honestly not that good on rated fuel economy. These included the saturn ion, chevy cobalt and aveo, ford focus, dodge neon and chrysler pt cruiser. All werel significantly lower in city driving, which is the majority of what I do. Even more sobering is the fact that the only available hybred for all three domestic manufacturers is a ford suv which isnt really that great on gas.

the big three are all about maximum profit, and the margins on econocars are slim. They also have a horrid track record when it comes to quality on compact and subcompact cars (pontiac fiero, comes complete with fire extinguisher). My own personal feeling is its simply a side business for them. the money is in the midsize cars, suvs and trucks. they make starter cars for kids just starting out because they have to offer something, but because its not as profitable, not much engineering goes into them. Now, thats just my thought, but when i see the cavalier get two body changes in twenty years its obviously not a priority for the company to put much effort into improving that section of its product.

[dukey]

a ride a 200cc quad bike around
no idea what the mpg is but i think its pretty awesome
top speed is like 50ish which is not too bad

its got a hitch for a trailor on the back if i actually wanted to carry some stuff

[jdmartin]

The one issue I haven't seen mentioned is the fact that these companies don't make any money on the sales of cars anymore. It is the financing of the cars that makes the bucks. Without their finance arms, GM and Ford would have been out of business some years ago.

The key to the manufacturer is to keep moving product that you can finance. That's why they will issue the company credit card to almost anyone. It doesn't matter if they break even or lose a few hundred on a car if the financing can make several thousand on the car, and you get the people locked into your product, coming back every few years to continue that cycle. They will issue credit to almost anyone, even the ridiculous risks. The worst ones they may resell on the market to another company. The best ones will make them thousands. When you see 0% interest, almost no one gets that rate. It is just a loss leader (like Walmart does) to get you into the showroom. Once you're in, unless you're about to walk, you will pay something in interest to buy that car. The company has to do it that way or else they can't make any money. How many people walk into the dealer with their own financing? Almost no one.

As long as they can keep moving vehicles that they can finance, they'll be fine for a while. If they can't move vehicles any more, or if there's way too many defaults, then they will go under.

[Heineken]

If you want to see the future of the automobile in the United States, take a look at Cuba today. We're going to be far more concerned about growing food in our gardens than with going pleasure motoring in our hybrids and on our motorbikes.

[CityInMind]

I think in the near future a great deal of Americans will be forced to scrap the idea of owning their own automobile.

If we proceed down the right path, we will rebuilt our decrepit old city centers into complact neighborhoods where people can accomplish most of their daily needs without an automobile. People will be pissed as fuck having to abandon their driving-only suburban utopias however.

[frankthetank]

I once saw a grandma on a 3 wheeled bicycle pulling a small boat. Not sure how she backed it into the water.

[redfire]

In the US, I think most people don't buy the expensive cars, SUV's, 4x4 trucks anyways.... they lease them!.... so in less than 3 years they just turn them in and if gas gets too expensive, can lease something more practical.

I can see low mileage SUV's, 4X4's being sold on the secondary used lots for a fraction of the original price.

It might be a good time to pick a used one up as a second vehicle, trucks are always useful-- you don't have to drive them everyday......

A dealer told me a few years ago only 5% of his sales were people walking in and paying cash for a new vehicle....

[redfire]

In the US, I think most people don't buy the expensive cars, SUV's, 4x4 trucks anyways.... they lease them!.... so in less than 3 years they just turn them in and if gas gets too expensive, can lease something more practical.

I can see low mileage SUV's, 4X4's being sold on the secondary used lots for a fraction of the original price.

It might be a good time to pick a used one up as a second vehicle, trucks are always useful-- you don't have to drive them everyday......

A dealer told me a few years ago only 5% of his sales were people walking in and paying cash for a new vehicle....

[Ghog]

Unfortunately I was in the car business a few years ago and the trend was not to lease, but to buy. A large % of my truck and SUV sales were buys not leases. People were more apt to take $500 payments for 72 even 84 months then to lease.

As far as trading these boats in when oils gets outragious, it can't happen. SUV values will be nill and rolling an extra $10k into an econo car isn't possible. Most credit institutions only allow financing of 120% of suggested retail. Rules for inequity will still apply in the future. Instead most will do like they already do now and do a voluntary repo.

[MonteQuest]

$this->bbcode_second_pass_quote('JoeW', '')$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.

[Kez]

Hey JoeW I agree that when people get sick of the high gas prices, a lot of them will dump their SUVs. The problem though is, that yeah they will save on gas each month and actually have $100 more per month to spend, but nobody I know is willing or even can go from an SUV to an Echo. You talk like 40 MPG is easy to obtain. Well, it isn't, unless you want to drive a very tiny car.

A lot of people I know drive SUVs because they need a big car and hate minivans. The option for them will be going from a $40,000 SUV to a $20,000 used minivan. They will most definitely not go from an SUV to an Echo, Corolla, etc. So their gas savings will not be as big as you think. A single guy going from an SUV to an Echo, sure, but the typical family can't and won't do that, they'll go for minivans instead.

[RiverRat]

I have two friends that are sales managers for large dealerships (one in Ohio and one in Michigan).

They both indicated that between 60% and 70% of their CURRENT sales are to people that have negative equity in their vehicles (ie … upside down in their loan).

Now … fast forward to a year or two from now. These people that are already ‘upside down’ will have to roll over even more debt to get another vehicle. With gas prices at $3.00 and up, supply and demand will swing retail prices 180 degrees. The gas guzzling SUV or truck will rapidly depreciate and the gas sipping compact will rapidly appreciate (due to supply and demand).

Trade in values for SUV plummet + retail price of a compact goes up + negative equity on top of negative equity = can not qualify for loan and stuck with current gas hog.

Unless lenders relax EVEN FURTHER their qualification standards (or consumers come up with large down payments) … a lot of people are S.O.L. in a bad way.

[Eli]

Riverrat it aint that bad.


The bike market will still be affordable for most and carpooling and bus ridding will become fashionable.

My buddy has 2 bmw x-5s, one 325 bw and a brand new f150 (I told him not to buy it) total owed on his cars is around 175,000. When the ecconomy turns tits up (like right now) he is so screwed. I feel bad for him.

[emersonbiggins]

$this->bbcode_second_pass_quote('Eli', 'R')iverrat it aint that bad.


The bike market will still be affordable for most and carpooling and bus ridding will become fashionable.

My buddy has 2 bmw x-5s, one 325 bw and a brand new f150 (I told him not to buy it) total owed on his cars is around 175,000. When the ecconomy turns tits up (like right now) he is so screwed. I feel bad for him.

[RiverRat]

$this->bbcode_second_pass_quote('Eli', 'R')iverrat it aint that bad.