The automotive landscape has been in a state of high-tech transformation. But when it comes to vehicle fuel technology, the newest new thing is probably the last thing many of us anticipated.
January’s Detroit Auto Show outdid itself daily with intros of cutting-edge thrills on wheels, most notably EV or hydrogen-fueled wonders the public has dreamed about for years. But the real showstopper, and the elephant that wasn’t even in the room, took some old-tech wind out of those new-tech debuts, and it persists in making headlines to this day: The falling price of a barrel of oil.
Like an old friend who hasn’t texted in forever, cheap gas surprised us when it showed up last summer, and it’s not talking about leaving any time soon. Quietly unassuming, but surprisingly sustained, conventional gasoline’s ability to rock the auto industry and buyers alike lies in this, its very unpredictability.
If plummeting gas prices are giving you second thoughts about switching to a more efficient or alternative-fuel vehicle, you’re not alone. Full-size trucks, SUVs, and even Hummers are suddenly in unexpectedly higher demand. Some dealers are staring down a stubborn surplus of plug-in, hybrid, and even fuel-efficient gas cars. Car manufacturers, who cannot turn on a dime like a buyer, have yet to reveal how they’ll adapt in the short- and medium-term as cheap gas plays the disrupter, warping projections for current models, 2016 debuts, and beyond (while also being mindful of impending fuel-efficiency mandates revisions).
Is this you in your dreams?
Which way to go?
So what do you do if you’re someone who wants to buy a vehicle in the next week-12 months? Despite the headlines and excitement in the news about gas and new cars, it boils down simply to what you’re going for. What matters most to you?
1) If saving money is your highest priority, buy what fits your wallet in the longer term. Choose a fuel-thrifty gasoline vehicle, or a plug-in hybrid or electric–anything but a gas-guzzler. Low gas prices are lowering demand for–and driving down the price of–high-MPG models while increasing demand for vehicles that get poor mileage – you can get a better deal right now on a gas miser than a gas hog. But when the oil price pendulum moves the other way–as even we non-Saudis know it will– demand for fuel-efficient vehicles will rise, as will their purchase price, raising the value of your car when and if you sell it. Additionally, the benefit of higher fuel economy for your monthly fuel budget will increase as the price of gas goes up, so the economics of your purchase will only get better over time.
2) If you have specific requirements, buy what fits your needs. If you drive a long commute, an electric vehicle with a limited-range, such as the Nissan Leaf, won’t make sense for you at any price. Neither would a tiny SMART car if you need serious cargo capacity. Economics should never override your fundamental needs.
Essentially, the above is purely a contrarian strategy: If everyone is buying beef and therefore bumping up the price of beef, then buy chicken. If you’re allergic to chicken, buy the beef.