Conflicting and Confusing Economic Indicators

Although I feel I have at least an average level of intelligence, I truly cannot understand many financial issues, that I read and hear, from everyday people, politicians and more.

For example, gasoline prices seem to be a favorite topic, and I wonder why consumers are so concerned as they rise, while the prices of the vehicles have risen so much and why many those same people keep leasing and buying very expensive SUVs, Huge pick up trucks ,etc.

I understand that contractors, plumbers, and the like need trucks, and anybody pulling a boat or camper, but, most people do not need them. Any all wheel, or 4 wheel drive vehicle is more expensive to buy, to repair, and they get much worse gas mileage. Often, they also require premium fuel and if you blow a tire, you often need to replace all four.

If gasoline was indexed to inflation, it would need to be around ten bucks a gallon, and even in California, it is more like six. Also, I have never heard anybody, except me, carp about the price of bottled water, even though at many places, it is over 100 bucks a gallon. A buddy lives in San Francisco, at a concert he attended, a pint of water was 18 , which is 144 per gallon. Even at a dollar a pint, that is still 8 a gallon.

But, gasoline, which has to be removed from the ground or under the ocean , refined , transported, have additives put in, , taxed , etc., is pricey at even 3 a gallon? I do remember gas prices at 29.9 a gallon, but, many brand new cars could be purchased for 2 or 3 grand.

Now, 7 and 8 year car loans are common, with the average monthly payment near 800 bucks. Those big , expensive fussy vehicles also cost more to insure and the 4 German brands depreciate worse than a stone falling off a cliff, because they become endless money pits as they age.

As I walk my dog, I do an informal survey, I roughly count the number of SUVS ,large pick ups, Range Rovers, Mercedes, Porsche,I see driving by,  and compare it to the number of compact, reliable Toyota and Honda sedans and minivans, and Japanese SUVS and so forth. I would guess that the inefficient vehicles, the pricey fancy brands, outnumber the more economical at 5 to 1.

At Bristol Toyota, here in Swansea Mass., I would sometimes swear they sell nothing but SUVS and trucks. There are not many hills here, the area can easily be navigated with only front or real wheel drive, but the majority still buy more than they need.

Also, most people never check the tires for air pressure, they wait until the warning light comes on, and even then , many ignore it. Properly inflated tires improve mileage a lot, and low tires generate too much heat, leading to blowouts.

If you only need a truck a few times a year, rent one instead. For the rest of the time, why not buy a more comfortable, roomier mini van, or a sedan.

A friend of mine bought a brand new top of the line Corvette, she pays over 1300 bucks a month for 8 years at 6 percent, alas, she constantly complains about the gas mileage. She is lucky to get even ten k miles on the tires, and the last one she bought had to have a camshaft replaced at 25 k miles, cost a fortune, but she was fine with that.

Finally, there are two large class a motorhomes for sale near me, I asked the owners why they are selling, and the answers were: Horrible gas mileage.  The huge purchase cost plus the financing costs, the tremendous depreciation and insurance costs , etc. were not a problem .

If anybody has read this far, (thanks, son), my friend , whom is in the suspender and clothing  business, told me that, ” things are holding up well!”, economically.