The joys and perils of driving less
July 29, 2008

 1. Finally getting the message: While politicians scramble to claim credit for the recent plunge in oil prices, it is everyday consumers who, forced to deal with the spike in gas prices, are simply doing less driving. In my house, I now drive my wife to the train each day, and she reports her train ride is getting more crowded. The figures back that up: We’re driving about 5 million fewer miles each month, and mass transit ridership is up sharply. That doesn’t solve everything, but at least we’re all trying.

2. This one seems so simple: But we have to drive sometimes. For those who drive for a living, like UPS drivers, how do you maximize your mileage? They’ve come up with the right approach.

3. The only bad news: The drop in driving means less gas purchased, which means less federal and state sales tax from gas collected, which means less money available to fix our crumbling American highways.

4. Reducing capacity: GM has announced it will reduce its truck and SUV production by 117,000 vehicles. Toyota has cut back its sales expectations for the year. Chrysler will stop leasing vehicles. It’d been a bad year for the auto industry, and one analyst quoted by the New York Times doesn’t see the end of the tunnel, let alone a light. “Nobody really knows if this thing has bottomed-out yet,” he said. And Ralph Rio from ARC Advisory Group notes the same thing in a response to last week’s blog: “As (General Motors’) SUVs come off rental they will be facing write-downs. The SUVs were rented expecting a certain residual value at the end of the lease. Well, that residual value is now a lot lower. The finance arm (which was one portion of their business where they made money) will become a huge drag. It looks bad now do the drop in sales of new SUVs and it is only going to get worse as they come off lease.”

5. And now, a little fun: This was presented to me as “Look, there’s an arc flash at the end of this video, so it’s relevant.” It’s not. It’s just fun, especially if you like Muppets…

Posted by Wolseley on July 29, 2008 | Comments (1)