Where is the logic in buying a gas-guzzling SUV just because gas prices are so low?
As gas prices have tumbled, gas-hog sales have soared. November sales of the Cadillac Escalade SUV were up 91.5 percent over November of last year. In December, sales of Ford’s Navigator rose 90.2 percent. The Dodge Ram and Chevy Silverado each saw sales increase by about a third. These vehicles have an average gas mileage of 16 in the city and about 22 on the highway.
In fairness, higher truck sales are primarily driven by higher housing starts, and construction is up, but buying a gluttonous SUV simply because gas prices have temporarily dipped is about as smart as buying a house without a roof because it’s sunny out.
Even the military-style Hummer H1, discontinued by General Motors for its fuel-thirsty ways, is attracting buyers. One local dealer told me he wished he’d bought a Hummer when owners were desperately selling them for $20,000 last fall. At the time we spoke – last month – they were topping 30 grand.
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Sacramentans haven’t followed suit. SUV sales in the capital region rose just 7.6 percent from 2013 to 2014, according to IHS Automotive. The industry consulting firm notes, though, that for the first time, SUVs overtook sedans in 2014 to become the most popular vehicle style in the country.
Auto industry analysts I spoke with all noted that today’s SUVs and trucks are more fuel-efficient than a decade ago. Still, their gas mileage lags decidedly behind smaller vehicles, and their growing numbers have an impact elsewhere. Steadily rising fuel-efficiency rates hit record levels last August – 25.8 miles per gallon – according to the University of Michigan Transportation Research Institute, which tracks mileage trends on a monthly basis. By December, it was 25.1 mpg.
Partly that’s also due to another puzzling consequence of falling gas prices: falling demand for more fuel-efficient vehicles.
The environmental impact is notable. Automobiles account for about half of an average household’s emissions, but a big SUV produces about three times the annual greenhouse gas tonnage emitted by a Prius.
“When people are buying an SUV, they probably aren’t thinking about carbon emissions or the global economy,” Kelley Blue Book’s Micah Muzio told me. “People just look at how much gas costs and whether they can afford that. For most consumers, it’s that simple.”
So simple that our memories are that short? In the early 2000s, with gas prices around $1.50 a gallon, Americans were buying SUVs as if that price would last forever. It didn’t. In 2007, when gas started hitting $3 and then $4 a gallon, SUV owners were stuck.
“Seventy-five percent of Americans keep their vehicle for seven years,” Amy Jaffe, executive director of Energy and Sustainability at University of California, Davis, said. “These cars stay on the road through the used-car market for 14 years. Even if takes two years for prices to rise again, you’ll still have the car for another five years, so why would you make a purchase based on a two-year phenomenon?”
Then, once gas prices rise, the same people who bought the vehicles when gas prices fell will be the same ones in the office break room whining that $4 gas is costing them $120 to fill up their extended-cab, four-wheel drive asphalt-eater so they can haul home carrots and a loaf of bread.
“And they’re going to write the governor about climate policy,” Jaffe scoffed. Or complain about wasteful government spending.
As Jaffe noted, purchasing a vehicle is one of the few times you can control what you pay for fuel. You can’t control the price of gas, but you can control how much you pay for it by the vehicle you choose to drive.
“I do think a little more long-term planning is beneficial because we do know gas prices will go up. Even though SUVs are more fuel efficient than before, there are still other fuel-efficient options,” Muzio said.
Just think: Instead of burdening co-workers with your shortsightedness, you can save the gas bucks and use them to pay your kid’s college loans, or save for retirement.
“Maybe the smart thing to do rather than buy a gas hog,” Muzio said: “Buy a Prius or Chevy Volt as their prices go down. Hold on to it a little bit and when the time is right, you can sell it on the market to people overreacting because gas prices have gone up.”
Market forces are market forces. How you benefit from them is up to you.
Bruce Maiman is a former radio host who lives in Rocklin. Contact him at
email@example.com. Follow him on Twitter @Maimzini.