The Dollar Stretcher : gas mileage

What Consumers Should Do About CAFE Changes Today

Gary — Tue, 26 May 2009 17:18:00 GMT

Just recently President Obama annouced a change in the CAFE mileage standards. Requirements for passenger vehicles will rise from the current 27.5 mpg to 35.7 mpg by 2015, while light trucks will go from 23.5 mpg to 28.6 mpg. While many are writing about what this means for the environment, auto workers and consumers in the future, we'll look at what consumers should be doing today.

The first thing that we can recognize is that the cost to buy a new car will increase. Automakers will have to make changes to reach the new standards. Those changes will cost money. That cost will be passed on to the consumer.

Professor Robert N. Stavins (Harvard Univ.) was quoted in The Belfer Center for Science and International Affiars saying "according to the administration, the increases in CAFE standards (including both scheduled increases already on the books and the new Obama proposal) will add — on average — $1,300 to the cost of producing a new car".

Professor Stavins goes on to say "Because CAFE standards increase the price of new cars, the standards have the unintentional effect of keeping older — dirtier and less fuel-efficient — cars on the road longer. There is abundant empirical research on this issue."

We're going to limit ourselves to the economic factors (not the environmental ones). What the good professor is saying is that you're going to be driving your older car longer. And, he's probably right. On a 5 year loan at today's average 7.56% (courtesy of Bankrate.com), that $1,300 would add $26.09 to your monthly car payment. Or a total of $1,565.40 total over the 5 years.

And, you can call me skeptical, but the federal government seems to have a pattern of grossly underestimating how much things will cost. So that $1,300 estimate could be short by hundreds of bucks. So you'll probably stay in your old ride a little longer that you had planned.

What does that mean? It means that you'll need to keep your car in dependable running condition longer. The way to do that is to start taking better care of your wheels now. Preventive maintainense is the cheapest form of car care you can find.

If you haven't already, get familiar with the service intervals in your owner's manual. It will tell you how often to have the oil and other fluids checked or changed. It will also specify when certain proceedures (like replacing timing belts) need to be performed.

Don't look at that schedule as something that would be nice to do. If you want your car to last longer, the scheduled maintainence is required. And, don't figure that your car is four years old and it's too late to protect it. Even if you've never changed oil in your car, you'll still help it by beginning regular, routine maintainence now.

Learn to do some of the maintainence yourself. You'll save half by doing your own oil changes. Only simple tools and training are required. Anyone can do it. You don't need to know one end of a socket wrench from another to follow directions. Wikihow.com and DoItYourself.com have step-by-step instructions.

Let's move to the financial front. It's much better to have the money ready to pay for the extra cost as part of the down payment. If you manage to save it upfront, it'll only cost you $1,300. But, if you include it in your monthly payments it'll add another $1,500 or more (depending on your interest rate). So you should begin setting aside an extra $50 or $100 each month in an account dedicated to your next auto purchase. If you don't do that now the higher auto payment will consume any savings in gasoline.

While it's always difficult to forecast the future, some things are fairly easy to predict. That CAFE requirements will mean that cars will cost more in the future and that some people will delay purchases is almost a truism. So it's the prudent consumer that will start to make adjustments today to avoid financial pain tomorrow.

Keep on Stretching those Dollars!

Gary

Auto AC vs Open Windows

Gary — Thu, 07 Aug 2008 13:09:00 GMT

Dear Dollar Stretcher,
In "Recession Proof Your Family Finances" by Diane Schmidt,she mentions never using the a/c in the car because it uses so much gas; there's a lot of confusion around this and I swear that I've read Click and Clack say that this isn't true; it's the wind drag caused by rolling down the windows that uses more gas; the a/c runs off the battery. could you please clarify? Thanks.

Debra

Debra,
I'm a car nut, but not an engineer so this won't be too techinical, but I'm confident of it since I've read the same answer over and over. Here's what I've read over the years.

There's no one set answer for all situations. You're balancing two different effects.

First, the ac does NOT run off the battery. It runs off of the engine. And it does take some extra gasoline to use it. How much depends on the particular car.

Second, opening your car windows does create some extra drag. More drag requires more gas to overcome that extra resistance to pushing the car through the air. How much drag depends on the shape of the car and how fast you're going. NO drag when you're at a stop light. Lots of drag on the interstate.

So you're dealing with trying to compare two very hard to quantify numbers. What most experts say is that there's not a big savings to turning off the ac. So if it's hot enough that you need it, don't feel bad about using it. If you're super conscious about saving gas you might want to turn it off and open the windows if you're driving in town. You probably won't increase your gas mileage by much, but for some folks every drop counts.

Keep on Stretching those Dollars!

Gary

Gas Crisis???

Gary — Mon, 12 May 2008 15:10:00 GMT

Just finished an interesting week. I drove across the state for a conference. The conference was about online financial news. Many of the discussions included comments about how higher gas prices were causing big problems for consumers. (BTW, I agree that higher gas prices are causing problems for consumers. But, as you'll see in a moment, I'm a bit confused as to how consumers are reacting to the problem).

The first thing I noticed was that people were traveling a little slower on the highway. I couldn't ask them, but I suspect that they were trying to save a little gas. According to http://www.fueleconomy.gov/feg/driveHabits.shtml gas mileage decreases dramatically when you go faster than 60 mph. Until recently here in Florida the interstate moved along at about 80 mph. This trip it seemed to be closer to 75 mph. I usually try to stay with traffic, so I managed to save myself a few dollars this trip.

But, the signals were mixed. Yesterday was Mother's Day. Mama didn't want to cook and didn't want to eat what I volunteered to cook. She wanted to do takeout from one of those national chain restaurants. At this one, you call ahead and just pull into a special section of the parking lot. A server comes out to your car. They'll go back and forth until your transaction is complete. At 6:15 on Mother's Day you'd assume that they'd be busy. And, they were. What struck me as odd, was that I was the only one who shut off the engine and rolled down the windows. Granted the temperature was in the upper 80's. But, if gas is too expensive, how can I justify sitting in a parking lot for 10 minutes with the engine running? (maybe not everyone is concerned with gas prices)

Next, I refilled my tank. While I'm pumping gas the fellow on the other side of the island comments "guess it'll be $4 the next time we fill up". I have no way of knowing whether that's true or not. Even the experts at the conference couldn't tell for sure. But, I am convinced that if we want to have low energy prices we'll need to address both the supply and the demand side of the issue. That means taking steps to conserve the energy we have. But, it also means using the resources we have to produce more energy. We may choose to buy an SUV to go to the mall. We can decide not to make our homes more energy efficient. We can vote not to drill for oil or build refineries. We can say no to windmills and nuclear plants near us. We can put all of hopes on tomorrow's technologies being clean and abundant. We have that right. But, let's not kid ourselves into thinking that those decisions don't have costs. They do.

Finally, a way that you can reduce your cost of gasoline. Just by buying and using a tire gauge monthly, you'll get about 10% better gas mileage (if you're the typical driver). An investment of less than $5 and ten minutes a month could save you many dollars. Along with driving slower, it's the easiest way to reduce your fuel bill. You'll find more on the subject here.

Keep on Stretching those dollars!

Gary