Gas prices put the brakes on pickup sales
Originally published Sunday, June 22, 2008 at 12:39 p.m.
Updated Sunday, June 22, 2008 at 3:41 p.m.
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Stumble It!ANCHORAGE -- The price of gasoline has had an effect on Alaskans' love for pickup trucks.
A rising supply of used trucks combined with low demand has forced steep price discounts at car dealerships. At some new car lots, fuel-efficient sedans have taken prime front row display.
State records confirm the status of pickups has slipped in Anchorage. The number of pickups registered in Anchorage declined last year for the first time since 2000.
In 2000, the Alaska Division of Motor Vehicles registered 54,142 pickups in Anchorage. In 2007, even though the number of passenger vehicles kept growing, the number of registered pickups dropped by more than 100.
"People still want trucks but that number is greatly reduced from what it was a year ago," said Henry Diaz, a sales manager at BMW of Anchorage, which sells used cars and trucks.
At Kendall Toyota of Anchorage, where Toyota Tundra pickups have been a top seller, "we're selling more sedans now than trucks," said Paul Moon, the advertising manager.
Prices on used, late-model trucks and SUVs are plummeting to a point where trading or selling them could be a money loser, said Chris Hester, a sales manager at Lyberger's Car & Truck Sales.
Until about two months ago, popular trucks and SUVs would not last on the Lyberger lot for more than a week, he said.
Since then, gas prices have soared above $4 per gallon. It was like "someone flipped a switch," Hester said.
Some people are buying trucks but it's a fraction of the total sales volume, he said.
That creates a conundrum for sellers trying to unload a gas-guzzler. By Hester's calculation, a fully equipped 2007 Chevrolet Tahoe has lost about $4,000 in its value.
"People who (have a car payment and) are trading them in are going to get hit pretty hard," he said.
Diesel truck drivers face the steepest prices for fuel but also some of the best options for cutting petroleum dependency. Some in Anchorage and the Matanuska-Susitna Borough are converting diesel trucks to run on biodiesel or vegetable oil.
Biodiesel is vegetable or animal fats blended with alcohol and other ingredients. It does not require any mechanical adjustments but does require building a processing center for the fuel in a backyard. There are no commercial biodiesel suppliers in Anchorage.
To use straight vegetable oil, drivers must install a new fuel tank and other gadgets. It can cost $2,000 to $5,000, depending on the vehicle.
Vegetable oil and home-brewed biodiesel are not an option for gasoline-powered trucks or cars. They're also not recommended for a new diesel truck because using them can void the warranty for the vehicle's fuel injection system.
Ryan Hunt, who runs an Anchorage landscaping company and drives a 2002 Dodge Ram diesel pickup, recently decided to embrace biofuel. He invested about $5,000 to convert the truck to run on straight vegetable oil. His friend Brad Grimm, of Anchorage, who does custom auto repairs, installed the system. They are testing the truck to make sure it works properly.
Hunt said he's already had one bad experience: He bought a drum of oil from a commercial recycler that was poor quality and it gummed up his fueling system.
"Right now, it's getting flushed," he said Thursday.
He's hoping that after working the bugs out of the system, he'll start saving at least $4,000 to $5,000 per year on gas.
Community Discussion
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In the 1980's gas was around 1.25 to 1.50 a gallon. I spent about 7% of my income on fuel for the car.
Now I spend less than 4% for about the same amount of driving.
Nobody likes higher prices, unless its wages on the paycheck, or the value of your house. (Is it really worth $400,000?)
If you own the oil wells, you are sitting pretty right now, but not forever. How much would you want for a dwindling supply of your assets?
I can't speak for the refiners or the retailers, but it seems that the big bite is at the wellhead, so all in the production chain are pretty much suffering under this price runup.
I am not defending what may be manipulation of the market and the fear mongering that's going on to raise prices. On the other hand, its very difficult to build any new supplies locally and the GLOBAL market is matching global demand with higher priced petroleum. If there's an ENRON type situation here, then lets act on it and shut it down.
If not, then we had better figure out a way to do the same with less, or quit worrying about it.
Since the State gets a percentage of royalty oil, why not take advantage of that and create a local market for more reasonably priced fuel. Could it be that the budget people at the state level are figuring on using the windfall to bankroll more state spending?
Heating is a big problem and the state should have the resources to help soften the blow for those on fixed income, or in the remote areas with limited options. But subsidies wont solve the problems, only create a new level of welfare.
As Americans, we tend to want bigger cars, homes, and more discretionary income. Could it be be that our appetites are more than our ability to feed them?
The factories that build pick-up's & SUV's are closing down for atleast six months & maybe more. We are not going to be allowed such vehicles in the future even if we need and can afford them. Lifestyle change is to be stuffed down our collective throats, like it or not!! All in the name of conservation & obtaining a GREEN planet and to fight global warming.
Sorry Woodman, but you'll have to find another scapegoat. You can't blame truck plant closures on environmentalists. It's called economics. When companies don't make money selling big trucks, they'll stop making big trucks, or jack up the price of a limited production of them.
One effect is the dollar only being worth about 50% of the Euro. Gas in Europe is about the same as it has been, $7 to $8 dollars a gallon going up but not like here. There money is worth more.
I also find it impossible to believe that it is lack of crude. Remember we are in Iraq and if you do not think we are not pumping those wells for all there worth, then you do not understand why we are really there. The ruling government in Washington and that includes Dems and Pubs do not care if we are there for a 100 years. Iraq has all the oil we need and the tankers are lined up 18 deep to load up what were pumping out. Yes we need to change our reliance on oil. But as long as we allow Oil Companies, Pharmaceutical companies and Health Care companies to run this countries government, we are slaves to their price fixing of energy, lack of alternative energy, affordability of health insurance and access to medicine at prices that are in line with what the average worker makes. We are The People, who are supposed to decide what the government does or does not. We let them run rampant and pillage and we take the crumbs. We get what we deserve and what we are willing to take. Not until we have taken our country back from the corporations will things change. Are you willing to kick them out or defend them and say it's one party or the other, they are all bought.
I wonder why trucks get such poor mileage? I have a 1/2 ton that weighs about the same as my "big car". The car gets about 25 Mpg and the truck gets 16 Mpg. Seems odd.
Truck production will match demand and as more folks get conscience about the cost to drive that demand will fall. Most people who drive trucks don't need them.
Blame the naysayer's and liberal'l that simply refuse to allow offshore drilling and drilling in America. We have enough oil. But their eyes are covered to the realization that our 60+% dependence on foreign oil is the primary reason for the high cost. OPEC knows this and is using it against us.. So till we have more refineries and more oil production on our own soil, just sit back and watch the price of gas and oil go up and the American ecomony continue to be torn down.
Dumping a gas hog may be a good first step in adjusting to crisis level fuel costs. Alaskans are experiencing an energy crisis unlike anything that we have seen in the past, and it is not likely to improve in the short-term. Oil prices are at an all-time high – in some villages the cost of fuel oil has gone as high as $10 per gallon. With gasoline prices reaching above $7.50 per gallon in many communities, many families and individuals are have difficulty getting to fish camp this summer in order to harvest next winter’s food; and this will be true of hunting in the fall and winter months. Schools, public buildings, health facilities and businesses are all facing energy costs up to double what they paid in 2007. In short, the current energy crisis threatens the very survival of all Alaskan communities.
Fuel prices need to be stabilized by using the state's Royalty Oil and selling it to Alaskans at a discounted price that includes only refining and distribution costs. If fuel prices are not stabilized, communities across the state are not going to survive the winter and more people will migrate outside and people from the villages will become energy refugees. AGIA deliberations should pause to address the energy crisis.
I looked into selling our Tundra for a little car, but in Alaska it almost feels like a necessity to have a larger vehicle. Yeah it only gets 16 mpg but for towing, hauling and safety we decided to keep it. There are plenty of people in Alaska that will keep their large SUVs or p/u trucks just for those reasons. If I had a car and got into an accident with a 3/4 ton, the 3/4 ton is going to win no matter the safety rating on the car. My kids will be safer in the truck so for now we will attempt to suffer through the price of fuel.
Is the US still exporting Alaska oil?
Ditto AKlifer...driving up the Richardson the other day I made a mental note of all the trucks and SUVs travelling south, and thought of what that would mean if I were driving a small car...definitely way more "big dogs" on the road than smaller vehicles, at least for now. BTW, when do you think we'll start to see ATV's and snowmachines as the main form of transportation around town??!! lol
Once again the state, that is saturated with oil, has offered nothing towards relief in gas or heating oil prices. Once again Fairbanks takes a backseat to Anchorage, where heating costs are 20% of the cost the average Fairbanksan pays. Once again it pays to have the largest number of voters and enables the Pols from there to ingnore the problems of the rest of the state. Once again our own local Pols have chosen to adhere to party politics instead of the concerns of the people they supposedly represent, the latter to ensure comity with their like minded buddies in south central. Once again we will fail to put some new faces, ideas and people with solutions or efforts to provide solutions in charge. Once again it is time to put some new earnest souls in the national and local positions of responsibility. The ones who are there now put us where we are now and were put there by us. Time for a change, a big one.
Was talking with someone from London who is visiting Alaska. She said gasoline there is, "One pound fifty per liter". At 3.83 liters to the gallon, and the pound trading for something like $1.89US comes out to $10.85US per gallon. Count your blessings.
Why do we have this fight to NOT drill in the arctic and off shore in order to save the planet,but end up watching another country drill the same oil nearby and then we buy it from them? The oil WILL be taken out. If we dont do it someone else will.
because the enviornmentalists are trying to control the economy through political lobbying.
Because trucks have rear end ratio axles that use more revolutions of the driveline to create one turn of the tire, this creats alot of torque better known as pulling power. Sure you can build a truck with a 2:10 rear axle ratio but it wont pull your boat very well for long.
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