Saturday, April 7, 2012

There IS a bright-side to high gas prices. (I am just the messenger, but I understand if you want to shoot me)...Read why here...

The fuel efficiency of vehicles SOLD in the US has increased in the last few years (Chart below).  However, the change in the last couple of months has been rather dramatic. 

This is a nice illustration of how the marketplace responds to changes in prices without a law or regulation.  As people purchase new vehicles, they are taking into consideration the high price of gasoline and buying more fuel efficient cars and trucks:

""Replacing a used vehicle getting 20 mpg with a new vehicle getting 24 mpg would completely offset an increase in the price of gas going from $3.33 per gallon to $4 per gallon, on an annual basis.""---Mark Perry at Carpe Diem

As the price of gas increases consumers are substituting low gas mileage vehicles for high gas mileage vehicles.  The market works---if given time.  This helps reduce the demand for oil and at the margins helps to clean the air. Win-Win----WINNNING!!

 March U.S. Light Vehicles Raise Fuel-Efficiency Bar

Source: WardsAuto

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