Having just recently bought a new car and made a few observations while driving to/from work:
I’ve never been so glad I capped my search at $15k.
Buying an expensive car is the dumbest thing you can do – even if you can afford it. I looked into some Lexus/BMW’s but left them on the table – and don’t regret it one bit. In fact, part of me wishes I went even cheaper (but part not because I’m really happy with the car I got). Why? Because this may be the last gas car I ever buy. No, seriously. If gas prices don’t go down (they aren’t projected to), then alternative fuel vehicles now enter the realm of not only feasible, but cheaper. Technologies that would have been not cost justifiable before now becomes viable technology at $50/tank or $100/tank when gas hits $8/gallon. People are desperate for alternatives, and there’s soon to be a swarm of smart people who will decend on this problem. When gas hits $8/gallon, you can start adopting some pretty expensive technologies. So, with my cheaper car, it can be paid of soon and I won’t cry a river when I go to sell it in 7 years and find it has no value. You’re an idiot to spend more than $20k on a car until this all gets sorted out and gas either goes down, or the viable alternative appears.
I got a call from a car dealer wanting to buy my car:
I just bought it, and they wanted to buy my car for trade-in. I told them I just got it 3 months ago – and he still wanted to deal. It was a cold-call by a big local dealership too. They’re getting desperate. They were even offering lifetime powertrain warranties on their new cars. Yes, lifetime. Heck, I even got 2 years bumper-to-bumper included in my used car.
Traffic congestion is down:
It’s getting eerie. I drive in to work and home again some days and can markedly tell a difference in the amount of road traffic. It’s quite noticeable. The mornings that I turn on the radio and hear about gridlock are fewer and fewer. I used to take 40-50 min to get home if I drove and traffic was bad, and now its usually 30 min or less. I rarely stop in traffic anymore and haven’t had to take my ‘back route’ to avoid freeway gridlock in weeks. I got up one weekend and the freeways around Portland were so empty that I honestly turned on the radio to hear if some world catastrophe had happened (or maybe Dancing with the Stars was on).
If this is permanent – then society is shifting – and it’ll be dramatic:
If you can’t drive anywhere anymore, or gas is $8/gallon – what do people do? You’d likely start staying in or going to fewer, but maybe bigger shows/larger events. We’ll get more choosy about going out and doing it less often. More people will stay at home entertaining with TV, movies/dvd’s, video games, or other home diversions. They’ll eat out less. We might even <gasp> interact with neighbors more. People in suburbia will get hit harder after having built for sprawl. Instead, people will probably want to concentrate more – and outlying areas of urban areas will decline in value as they require a lot more money to get to/from services and work. Some of this is already happening.
Business in general will continue to slow:
As gas prices stay high, transportation will cost more, and people will again buy less. Food/goods/etc will all go up in price. This will drag on the economy and you shouldn’t expect things to improve much. Some have even said the ‘D’ word might be coming (Depression). I’m personally working on saving up as much reserve cash as I can – and putting it into something that will hold its value. Mutual funds are one option as long as they stay above inflation – but foreign currency is actually starting to look as a viable alternative if the dollar keeps dropping…
Europe will weather better:
If we’re moving into a new reality of fewer and fewer cars – we will now reap the pain of our urban sprawl and 8 lane highways right through city centers. They’ll be empty. Cities and communities will need to shrink back down and compact services. European cities were built this way, and suffered in recent decades because of cramped quarters. Now, we go back again to foot/public transport. Something their ped-friendly cities will weather far better than our layouts that require a 3 mile drive to groceries, a 2 mile drive to hardware, etc.
We’ll likely start loosing weight:
Walking more ain’t a bad thing – especially if you’re using public transport.
Public transportation isn’t just for liberal arts majors and homeless anymore
Simple enough. There are folks in Portland with chartered work buses from Portland/Salem now.
(moderately off-topic) Buy into the crash, sell into a boom
I’m also very very glad I didn’t buy a house these last 2 years. I felt like I had been missing the meteoric gains in housing that people had been seeing during the boom times and I was stupid for sitting on the sidelines. Now, I’m watching people lose 10’s of 1000’s of dollars in value. standing in my window at home, I can count 5 different forsale signs (and one is now edging up on being for sale 2 years now) in a neighborhood when people just 3 years ago didn’t even bother putting up forsale signs as they could start a bidding war just putting up a RLMS listing. It reminded me again what ‘buy low and sell high’ really looks like. Never buy when a boom is going on, save your money for when things are going down.