Saturday, August 09, 2008

The fate of the SUV ecconomics versus conservation
The NYT editorial ......
Editorial
A Future for S.U.V.’s
'Americans should consider selling their suddenly redundant S.U.V.’s to the scrap market or to a foreign country. If all else fails, there’s always art.');
We have heartily applauded Americans’ collective decision to recognize the finite nature of the world’s supply of fossil fuels and to start driving sensible vehicles. But we must also acknowledge that this abrupt change of heart is creating a new national challenge: what to do with the suddenly redundant S.U.V.?

The question is not only of pressing importance for Detroit’s automakers, which are losing unimaginable sums of money as they rush to replace a business model centered around multiton trucks with one based on cars. It is a growing problem for hundreds of thousands of Americans who can’t afford to drive a hulk that goes 13 miles on a gallon of gas when that gallon costs $4. Monthly sales of new S.U.V.’s fell 25 percent in July compared with the same month in 2007. One report suggested that in the first quarter of the year 17 percent of S.U.V. owners in the country were trying to get rid of them.
It won’t be easy. Thousands of secondhand S.U.V.’s sit unwanted and ignored in car dealerships across the land. On eBay, bids for 2008 Hummers are coming in at 50 percent of the sticker price. Car companies are not selling formerly leased S.U.V.’s for anywhere near the price they counted on.
Some drivers are facing a grim choice between trading in the Ford Expedition for less than what they owe on it and continuing to shell out more than 25 cents per mile for gas. Even donating unwanted S.U.V.’s has become less attractive since the Internal Revenue Service tightened rules on deductions for such contributions.
We suggest exploring foreign countries. The Russian market for cars, for instance, is booming — thanks to a fast-growing economy and generous government subsidies that are keeping a lid on the price of gas. The best part is that Russians prefer secondhand imports over domestic Ladas and Volgas.
Then there’s the scrap market. With demand for steel growing briskly in developing countries, prices of scrap steel have doubled over the past year. Exports in the first four months of 2008 rose 22 percent compared with the same period a year earlier. Demand is so strong that manhole covers are disappearing from city streets, reappearing at scrap yards outside town.
If all else fails, there’s always art.
The artist John Chamberlain made a name for himself making sculptures out of crushed automobile parts. Cadillac Ranch — an array of graffiti-covered Cadillacs protruding at an angle from a field near Amarillo, Tex. — has become one of the nation’s landmarks.
With a few adaptations, a Lincoln Navigator might make a nice streetlamp.


But the point is that while we all want to save on petrol, the ecconomics mean that it makes sense to continue to drive the large car for a reasonable period of time becuase the cost of petrol equals the loss on selling or trading in the SUV. I faced this problem and bought big a coupolle of decades ago when as a family man struggling to make ends meet, sort of anyway :-), I choose to buy the cheaper Holden 2600cc , and later a 3000cc, instead of the more ecconomically running four cylinder car ... that was just too expensive for my pocket book.

I'm glad I have a small one which takes me up the mountains occasionally ... rather than just driving around town ... which currently does 5km to the NZ dollar .... when I bought it three years ago the cost was 7km/dollar. Dunedin to Wanaka was $45, last trip $60. That is towing my baby camper trailer which saves me money when I stay at the motorcamp.

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