New Cars and Gas Prices: Am I Missing Something?
New Cars and Gas Prices: Am I Missing Something?

New Cars and Gas Prices: Am I Missing Something?

Maybe I am kind of slow when it comes to some things but I don’t seem to understand what is happening in today’s automobile market.  I caught a short article on the Internet the other day that said gasoline prices were at their highest levels since 2008.  The national average hit $3.37.9 per gallon recently, about 75 cents higher than last year.  The article also predicted that gas could reach $4.00 per gallon by Memorial Day due to the “fear factor” from the Middle East.  Gasoline is already over $4.00 per gallon in the State of California.  A barrel of oil is predicted to reach $140.00 a barrel very soon.

Okay, so I open up my friendly Sunday paper and I happen to notice an article from the Chicago Auto Show that basically said that “horsepower still moves product.”  Chevrolet unveiled the most powerful Camaro ever – a 550 horsepower engine in a Model ZL1 with a 6.2 liter V8.  Hyundai’s V8 not only boasted a 5.0 badge, as the article stated, but the Hyundai’s engine is linked to a new eight speed transmission.  Now Cadillac had just introduced a new 506 horsepower V8 a few weeks ago.  I realize that these autos are, no doubt, specialty models but, while Chevrolet sold its second Volt the other day in the State of New Jersey, horsepower and more powerful automobile engines seem to be moving up.

I continued my analysis by paging through the auto ads in the same paper.  I did notice that the car companies are very careful not to mention or dwell on horsepower in their ads.  They tend to concentrate on pricing.  I get the feeling that the American auto companies are still not on the same page as the American car buying public when it comes to mileage.  I may have missed one but I could not find mileage mentioned in any of the auto ads that I scanned.  Apparently, tilt steering wheels, 18” aluminum wheels, On Star, and 8 speaker Bose sound systems are more important?  Even the Ford Fiesta and Ford Focus had no mention of miles per gallon.

I think this is sad as I see the real world is starting to crash down on the American consumer.  Even if the forward thinking analysts are off, I can’t help but see gasoline prices rising just based upon simple supply and demand.  I had mentioned in a previous article a few months ago that demand for the price of oil is to a great extent dependent upon more than just U.S. demand.  I am afraid that we as consumers are getting caught with our proverbial “pants down” again.  How quickly we forget that the price of gasoline goes both ways – up and down.  Who would have thought that Moammar Gadhafi would make my weekly commute to work cost $80.00 more per week!

Months ago, I was excited to read about the development of new electric engines and hybrid vehicles.  Did Congress not pass new CAFÉ standards that demanded that the fleet averages for auto companies move up?  Has our dependence on foreign oil gone down?  Think about the average car buyer who takes advantage of the auto companies offer to purchase his or her car today over 72 or 84 months.  Do you think the price of gasoline in 2018 will be $3.49.9 cents a gallon?  I don’t think so but then again, maybe I just don’t get it.

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Written by
Donald Wittmer