TM AUTO

FUEL PRICES 2022… WHAT TO EXPECT

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THE CURRENT FUEL SITUATION 

You and the other 228 million drivers in the US are by now wondering how long before gas prices drop. So here are the facts and a few helpful chasers to choke them down.

Remember when we had a backup plan for high gas prices? From 2009 – 2015 diesel fuel averaged 32 cents less than gas. Drivers in the 80’s and 90’s saw similar price comparisons.

 

Owning a diesel vehicle became a no brainer for saving on fuel costs. Not the case anymore as we see diesel prices creep up even higher than already crazy gas prices! In fact all fuel costs are susceptible to the current cause and effect.

We saw temporary relief when president Biden announced the release of federal reserve oil at the end of March, but that was it. Gas prices are on the rise again with no visible signs of stabilizing. Here’s what’s going on and what we can do to deal with it.

 

WHAT TO EXPECT

First, don’t expect those $2.89 per gallon prices of 2021 back anytime soon. From what analysts are saying, and this includes the Texas Oil and Gas Association, a steady decline isn’t expected while the war continues in the Ukraine. Personally, I would add that with transportation at a premium we should expect trucking, rail, and shipping to second that emotion and to promote high fuel prices even after the war has ended. It might be a good idea to settle in and begin formulating a strategy for saving on fuel costs.

 

WAYS TO SAVE 

Stay close to full: I like to keep my tank relatively close to full, when I notice a dip in prices I top off the tank. Never let it go below a half tank.

 

Use gas apps & points: GasBuddy and Waze are two popular options. Harris Teeter offers shopping points to save at the pump (We use this a lot). Costco and Kroger have similar programs.

 

Pay with cash instead of a card: Some stations offer a discount for your cash because it saves them on processing fees. Stations are dropping their price 5 cents per gallon on average. That’s significant on a full tank!

 

Drive at or below speed limits: Ever notice the difference in fuel mileage when you’re keeping it at 55? It’s pretty fantastic, try it. Also, try accelerating to speed less quickly to help.  A car’s gas mileage typically decreases at speeds over 50 mph. And for every 5 mph over that 50 mph speed limit that you drive, it’s like paying an additional $.20 per gallon. Frequent bursts of acceleration and braking reduced average vehicles mileage by 2 to 3 mpg.

 

Skip the premium: Save money and skip premium gas unless it is required. If there is only mid-grade, or premium fuel available, this will work fine in a car that is rated for regular gasoline.

 

Check tire pressure: Having tires with lower pressure than what is recommended on your door jamb sticker can affect performance, tire longevity, and fuel economy.

 

Station rewards program: Check at your local gas stops to see what discounts they offer with their rewards program.

 

“With transportation at a premium we should expect trucking, rail, and shipping to promote high fuel prices even after the war has ended.”

 

 

BOTTOM LINE

Settle in and pony up folks, it could be a long ride. We’ve all had to tighten our belts from time to time and this is one of those times. Looking for something with better gas mileage?

Call or text (757) 560-4252 and ask for Mike Love, I have answers. 

 

 

 

 

Sources:

Kellerman, Austin “Are gas prices going up again, yes and here’s why” Newsnationnow.com Posted: APR 29, 2022 / 09:38 AM CDT | Updated: APR 29, 2022 / 09:38 AM CDT Web. Retrieved from: https://www.newsnationnow.com/us-news/are-gas-prices-going-up-again-yes-and-heres-why/

Johncox, Cassidy “Gas prices: How the price per gallon has changed throughout US history” clickondetroit.com March 18, 2022 Web. Retrieved from: https://www.clickondetroit.com/money/2022/03/17/gas-prices-how-the-cost-per-gallon-has-changed-throughout-us-history/

Gillman, Steve/Dow, Nicole “How to save money on gas: 20 simple ways to save” thepennyhoarder.com March 25, 2022 Web. Retrieved from: https://www.thepennyhoarder.com/save-money/how-to-save-on-gas/ 

UPDATE – The $7000 Used Car… Gone for Good?

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Ask Mike Blog 7k Used Car Gone

SEARCHING FOR THE ELUSIVE $7K USED CAR

I remember when $7,000 used cars were a thing… six months ago! They were for sale in front yards and used car dealerships everywhere and it seemed they would be around forever! Hey, for $10,000.00 – $15,000 you could drive away in something amazing! People, I never thought I’d say this but they may be gone for good. The average transaction price for a used car was $25,410 in the second quarter of 2021, up from $22,977 in the first quarter and 21% year-over-year, according to data from online automotive resource Edmunds. That figure marks the highest average price over a quarter for a used car that Edmunds has ever tracked. In June of this year the average used car price leaped $7,583. The new average cost of a used car is over 33% higher than a year ago, it’s time to reevaluate our expectations. Read more about THE CAR BUBBLE. 

The average cost of a new car in 1990 was about $9,500. This means after the first year’s depreciation (20-30%) and subsequent year’s (16-18% annually) we might buy her used in 1995 for around $2,000.00 – $3,500.00. The average price of a new car in 2020… $37,000. Over the next 5 years that car loses around 60% of its value. If you don’t have a calculator handy that puts the price at around $14,500.00 used. Today we can add about $7,000.00 to that number bringing our estimated cost for the five year old car to $21,500. Expect that number to be higher depending on condition and mileage. Chip shortages, labor problems, and general industry chaos can be held responsible for the blight on our $7,000.00 used cars. 

 

There Is A Bright Side

Quality: New car quality has increased and is still rising, they simply last longer. They’re still kicking like a mule at eleven plus years. This means that a five year old car has a long life ahead of it and the owner knows it. It’s price will reflect its longer life.

Supply and demand: Used cars are practically non existent these days compared to just a year ago. Increased SUV, truck, and crossover sales in recent years has led to less small, inexpensive vehicles on the used market and less means more for private sellers. With less inventory on the market, there is less competition and this is powerful leverage for sellers so if you have an extra, consider selling at a profit.

 

Not As Bright

Larger more expensive vehicles: The COVID collateral damage? Higher end cars with more options are being produced for solvent buyers, shrinking the affordable used car supply. Since you’re not likely to find many of them for sale, they come at a premium. If you do find an inexpensive used car in great shape, move fast, it won’t be available long!

 

Are there any cheap used cars out there worth buying?

2016 Subaru Outback

Of course there are, just increasingly harder to find. Best bet is to purchase from family or close friends that can guarantee the car’s history. 150,000 plus miles is fine as long as the car has been properly maintained and loved. Otherwise it’s anyone’s guess how long the car will last. Dealers can’t sell what they don’t have and there are so few of these rare birds available that dealers can’t find them either. The discerning used car dealer has a reputation to protect and must have a reasonable amount of confidence in each used car they sell. Oftentimes cheap is just cheap and that doesn’t meet inventory standards.

The New Standard

What should you expect to pay for a reliable, well maintained used car today? For the features that most of us want with 60-80k miles you can expect to pay on average around $19,000-$23,000 for your 4 to 5 year old used vehicle. Yes, there are exceptions both higher and lower depending on the car and condition specifics but buyer beware, if it’s cheap it’s a heap! Have questions? Call or text (757) 560-4252 and ask for Mike Love, I have answers. Happy hunting folks!

 

TM Auto Wholesalers, Chesapeake Va

 

 

 

Sources:

Frio, Dan “Cheapest Used Cars” EDMONDS.COM December 10th, 2019 Web. Retrieved from: https://www.edmunds.com/vehicles/cheapest-new-cars/

Edgerton, Jerry “Cars Now Last Longer Than Ever.. Will Yours” CBSNews.com August 7, 2015 Web. Retrieved from: https://www.cbsnews.com/news/cars-now-last-longer-than-ever-will-yours/

Mattone, James “Used Car Prices at Highest Levels in Three Years” media.thinknum.com August, 2019 Web. Retrieved from: Mahttps://media.thinknum.com/articles/used-car-prices-are-at-highest-levels/