If I was you. I would buy a very cheap used car. The older the better. Keep you yukon. since it is paid for it can be your back up. The used car can probably be paid for in cash so no payments. you figure if you get the car for 2,000-3,000 then it would take you about 10 months without a break down for it to pay for itself. If it does break down you have the yukon. about 10 years ago i had a 1989 Mustang 4 cly stick got about 40mpg. I'm sure there are some of those like that out there. For a work car it will be fine. If gas prices retreat you can drive the yukon. If it doesn't you aren't going to get much for it anyhow. Most car dealers will not even take them for tradeins.
Most older cars can not command the prices the new smaller cars are getting. Hybrids will not pay for themselves for ten years. I am trying to wait for better technolology to come up before buying the hybrids/electric cars.
In this economy i am leery of taking on another monthly payment. as it is now I can get by for about 1.5 - 2 years without needing a job. enough time to go back to school and retrain if I have too.
My dilemna is my 2001 Yukon is paid for. So, sure I get bad gas mileage, but small car prices are shooting through the roof because of demand and predicted future demand. So, do I keep driving the Yukon and getting 15MPG... which cost me about $400 in gas per month given my driving habits... or buy a new car which will cost at least $2,000 in transaction cost (tax, tag, titles, fees, etc..) and then at least $15,000 for a used civicjust to get 30MPH? Or even worse if you want a hybrid and you will spend $25,000? Even in the cheaper scenario, I save $200 per month on gas, but incur $600 per month on new charges so I am negative $400.
Now, I could trade my Yukon in which is worth $7,000 at best... just because of the 96k miles and age.. but the car could easily go 200,000 the way I maintain it. Even with trading in and getting as close to break even in the as I can, I am driving a much smaller uncomortable car now. And it is break even or slightly negative.. why?
So, yes I am changing my spending habits to accomodate gas...but changing cars seems like an poor choice in my situation.. if anyone can make a financial case for switching I would love to see it.
The other thing to keep in mind is most people in the US have car payments and many are upside down... so even if I have bad choices... at least I have them... most don't which is why changing cars will be tough.
I do think people will start staying in their cars a lot longer now.... I have always been an advocate of buying used and keeping them 4 ever.
the limit is $75.00
a little tip if you get in tough times. the limit is set by the gas station not the bank. So if you have only $1.00 in the account the bank will greenlight the transaction. The rest of the $74.00 is on the gas station. Of course you will get hit by the bank for an ISF charge etc but if things are tough it's a way to at least get to work until the paycheck comes.
And believe it or not people are doing this. The way I learned about it was waiting in the checkout line. someone was complaining about the cutoff. The sales clerk said the above; then added they are seeing a big increase in the amount of times this happens and the gas stations are left holding the bag. they were thinking of dropping the cutoff to $50.00. so if all of a sudden you see the cutoff for credit and debit cards at pay at the pump go down to $50.00 you know times are really bad and it would be time to short the market or get the hell out of it.
I moved by choice to something smaller years ago. something about giving the gas station all my money made me pissed off. Use to drive a minivan for the kids. bought a small 6 cly. Gets about 30mpg the minivan use to get on a goodday 15mpg. still spending the same amount if not more on gas though. Gas went up from $1.50 to $4.00 so not only did I have to go to a smaller car I had to cut back on driving too. which causes me to go to the store less, go out less which leads to spending less. Moral of the story? you can not conserve yourself to a better economy. when you conserve the only thing you get is a smaller economy (or car). Reagan understood that. carter, bush and BHO do not.
to keep sending 72% of the economy we need cheap energy. It is really that simple. This is not an "overthinking" moment in the market. Keep it simple. short the companies that make things people can do without (LVS, hotels, airplanes, SBUX, DRI etc,), the impulse buys and go long the companies that give cocooning a good name GME should do well in this regard, so too DIS, HAS, MVL, ATVI, TTWO, TSN,) Also think cooking will make a major comeback. So tuperware, rubbermaid etc look good too.
The market will drift lower. Today's action was nice to see. The market for a moment there looked like it want to drop another 200 to 300pts. But oil dropped and the market rallied. If anyone still has doubts about the market and oil trading together check out the charts of the DOW and USO today. The day's high in USo corresponds to the day's low's in the DOW around 1:00pm.
Still see about another 1000pt drop coming but from today's action looks like we might get there by the long road not the crash road. still too early to tell. Everyday gas stays at these prices, the economy loses alittle juice and consumers cut back.
I think one wake up call has been for people (like me) with SUV's...
When I go to the station I can't even get a full tank in my Yukon... the limit is $75.00. Something about that really has affected my spending habits - makes me feel wasteful since that could feed a family in need for a week. And I drive 70 miles each day for work. Add personal miles and I am filling up every 4 days.
Makes me feel like buying a used 4 cylinder POS for $3-4k and driving it until the wheels fall off.
I'm noticing the same things, less cars on the road, less lines at wendy's,mcd, olive garden. hell this past weekend even WMT wasn't as crowded it seemed. could just be a hangover from memorial day weekend but I have to wonder. while a large part of society will be able to wether the storm at the present prices there is a large and growing minority IMO that can't. What is the tipping point? I don't know but I think we are fast approaching it. Even if the economy manages to stay out of recession it still will be at very slow growth rates. I think we retest the index lows at least before we can move higher. This week should be important but it will be two or three months before this recent gas increase starts showing up in the numbers to a large degree.
This past Friday night I may have gotten my first look at a slowing economy.
We often go to the nearby RED LOBSTER for dinner on Friday nights. Normally we have to get there at about 5:45PM to be seated by 6:30PM. When we leave there is normally a line outside and no parking spaces available.
This Friday night we happened to be in a the area at 5:30PM and noticed that the lot was not full. So, we went in and were seated immediately. When we left there was still no line.
It's a scary time. Seems like all the cards are stacked against us. First, the real estate market. Then our financial institutions. And now the consumer is on life support. Under normal conditions, GME would be a screaming buy at these levels, but it's kind of crazy to play the consumer disc sector for anything more than a trade will all of the head winds.