Wednesday, December 23, 2015

Gas is cheap...for now

The news that gas prices in the USA have dropped below an average of $2 per gallon has been everywhere recently. I heard it from the local news, the national news, NPR, and various Internet sources all within the space of a day.
Nothing wrong with saving a bit when filling up your tank, right? Well, sort of. It's nice to see dollar figure down around double the number of gallons, instead of 3 or 4 times. I don't drive a whole lot myself, so I rarely fill up more than a couple of times per month. Plus my car is pretty fuel-efficient, 30-35 miles per gallon. Even so, I like paying less, and those who drive more like it even more.

The problem is the behavior that these low prices encourage. People are buying more big, inefficient vehicles. It's not just the last few months - similar things were being reported back in February 2015. Trucks, SUVs, and other inefficient vehicles are more popular when feeding those hungry beasts is cheaper. I understand the logic, but it's not good long-term thinking.

Buying a vehicle is a medium-to-long-term decision. Most people can only afford to do it once a decade or so. The fuel costs for the car or truck you buy today are going to continue to hit your wallet for many years, and the gas prices may not stay low. Anything from a change in the global oil economy to a local refinery problem to changes in taxes and regulations can cause prices to go up.

Unless you need a large vehicle for your family or as part of your job, it's going to save you money in the long run to go with a smaller, more fuel-efficient vehicle. Not only will you save on regular fuel costs, but overall cost of ownership is lower, as this Consumer Reports article points out (check out the table near the bottom). Consider lower environmental impact and the ability to park in compact parking spots a bonus.

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