Historically, car buyers have been less sensitive to swings in fuel prices than you might guess. People want the cars that they want, and most consumers seem to view energy price changes as temporary. New data shows that one part of the market maybe doesn’t look at it that way anymore.
I flew from NY to LA yesterday for the Galpin Car Show this weekend and I’m still recovering from the 60-degree swing in temperatures, so thanks to Thomas for taking over Morning Dump duties yesterday. I still have New York on my mind, and I’m glad to see the Chrysler Building is getting saved. You know who might not be saved? One or both of the brothers behind the First Brands fiasco, who appear to have turned against each other in the legal fight over the failure of the company.
Cars & Bids is putting up cars in its second hybrid/live auction, and there’s some great stuff being listed.
My Hybrid Theory Hits The Used Car Market
I’ve mostly discussed the Decade of the Hybrid as a new car phenomenon, as that’s where the initial wave of hybrid growth/EV stagnation first appeared. What about the used car market? New data from Cox Automotive shows that fuel economy is one of the best predictors of value change this year.
The wholesale value of a used car is how economists and dealers look at the used car market in general and the best source of this data is the Manheim Market Report (MMR). Here’s how the MMR normally breaks down values:
Normally, I think of car values in terms of class as well. Is it a luxury car? Is it a truck? That kind of thing. Props to the folks at Cox/Manheim, who made a chart I’ve never seen before and is super helpful:
Look how clear that is! Excluding EVs, in the first three quarters of the year the most obvious predictors of value change is now fuel economy. I feel like it’s not often these days that you’ll get a chart that’s so obvious.
Here’s Cox’s Jonathan Gregory with more details:
That’s a spread of about 25 percentage points in nine months between the least and most efficient vehicles. And because EVs aren’t in this chart, the efficiency premium isn’t just an EV story: hybrids and other high-mileage vehicles are gaining value while the rest of the market depreciates. Some overlap with segment remains, since the low-MPG buckets are still dominated by full-size pickups and large SUVs. But the gradient is steep and orderly enough that fuel costs are clearly part of the story. Diesel is the sharpest example. Diesel vehicles are only about 3% of the units on the ground at Manheim, but with diesel near $6.50 a gallon, diesel days’ supply rose to 39 days in September. That’s 11 days above the overall market and up 27% from a year ago
If you’re sitting on a slightly used hybrid vehicle you might consider that now isn’t the worst time to trade it in.
The Chrysler Building Is Saved
I love when people visit New York and look at the Chrysler Building and immediately go “Is that the Empire State Building?” I get it. The building, while no longer the tallest in the world, is still one of the most distinct.
It’s also been in a longstanding state of disrepair. Like the Chrysler brand itself, though, it sounds like the building is getting a new lease on life.
The skyscraper, opened in New York nearly 100 years ago, will see its Art Deco crown polished and restored during a refurbishment that will also involve the restoration of the building’s 77-storey façade.
Developer Tishman Speyer has taken over the lease from the Cooper Union for the Advancement of Science and Art, a private college.
Tishman Speyer and its partners will invest $235m (£178m) in the project, as part of which it will upgrade the 61st floor, which is home to huge eagle gargoyles and will also feature an “upscale” lounge.
That’s fun. The money from the building will apparently be used to return Cooper Union to a tuition-free campus.
The First Brands Fiasco Turns Fraternal
First Brands is/was the megaconglomerate behind many of the best known brands in the automotive aftermarket. The company had to file for bankruptcy after it was revealed that the leadership allegedly committed massive fraud to the benefit of its owner and founder.
According to Bloomberg, both the owner and his brother are requesting separate trials because they plan to blame the other brother for everything that happened:
Patrick, the company’s founder and former chief executive officer, said in court papers that he gave Edward a powerful position as executive vice president because he trusted his younger brother completely. Edward cultivated and managed lender relationships and entered into harmful side deals “which funneled tens of millions of dollars into Ed’s own pockets,” Patrick’s brief said.
“To keep his scheme afloat, Ed lied, shirked inquiry, and concealed his self-dealing from Patrick, who was focused on running the companies he founded,” Patrick’s lawyers said. “All told, Ed’s conduct shows that he alone organized, managed, and directed the alleged fraud.”
And the other side of this? Per Bloomberg:
Edward offers a starkly different account, saying Patrick controlled First Brands while he “played the exceedingly narrower role of sourcing working capital financing for the company.” His older brother got others “to brazenly falsify and misrepresent the company’s financials and pervert the legitimate financing structures that Patrick enlisted Ed to secure,” Edward’s lawyers said in a Sept. 4 filing.
That is messy.
Cars & Bids Goes Live
The renewal of Willow Springs is an exciting story, and long overdue. As part of the big Willow Springs Reimagined event celebrating the upgrades, the folks at Cars & Bids are going to do a hybrid auction (live and online at the same time, not of hybrids), and there’s some great stuff.
Obviously, Doug’s Ford GT is high on the list, having both the Doug provenance and being a Ford GT. There’s a Porsche by Singer, which many people find appealing.
I’m a simple man, though, and I think I’d be happy with the Renault Clio V6.
What I’m Listening To While Writing TMD
Now that I’m on West Coast time I have to adjust, because I’ve been living in a “New York Minute” as Don Henley sang… though I’m not sure what a New York Minute is.
The Big Question
Do you care more about fuel economy than you did five years ago?
Top photo: Cox, GM, Honda
I’ve only ever driven efficient 30+mpg vehicles since I got my license. Being inefficient is physically painful to my German heritage.
Me buying that low-mileage 1st gen Honda Insight, getting it operable again, and letting a friend keep it at his place and use it, turned out to be a good investment thus far. If the refurbished NiMH pack I put in it fails, it’s going to become an EV conversion.
100%; bought a PHEV a couple years ago and although not the most efficient, with a small electric-only range, I’m still able to do almost all my suburban running around on electrons. In NE, during the warmer months, I can usually go 4+ weeks before using half a tank. Winter is more like 80/20 for gas use, but still using less overall. I wouldn’t even consider anything other than partially electrified moving forward, unless for a purely fun “extra” vehicle.
If I had to buy a car now compared to 5 years ago, I may deviate to something more fuel economic. But only because what I ended up buying is now 17 years old and thats a bit long in the tooth to get into as a daily.
If I was the type to carry a loan, those EQS deals a year or so ago were really tempting but thats mellowed out. Even at a 30 mile one way commute I really wouldn’t put much emphasis on something that gets more than high 20s.
TBQ : Being retired now not so much. Please understand that the oil industry is greatly subsidized. The BTU’s in a gallon of gasoline is really worth more than ten dollars. Oil of finite and so are we.
Please don’t get me started on Don Henley.
Which Don Henley? The angry one? The hypocritical one? The condescending one? The superiority complex one? lol 🙂
All of the above/below.
Manheim Market Report
When I lived at my parents’ house, these guys had the steamroller market cornered at xmastime.
Them and the Trans folks from Siberia.
Ain’t no way that whole orchestra is trans, Tone.
Just the Siberians.
I’ll be the contrarian and say that I care less about fuel economy than I used to. I’m semi-retired and only drive about 6000 miles/year. Doesn’t really change much for me if gas is $3 or $6. Aside from a GMT800 outlier that’s long gone, my current DD gets about 28mpg in my driving, and it’s the lowest mpg of any car I’ve owned in the past 25 years.
If and when my 55k mile 2017 CX-5 needs to be replaced, I will surely buy some sort of vehicle that has an electric motor in it. But if my situation remains the same, I’ll be keeping the Mazda another 10 years or more.
I’ve been all in on hybrids as daily drivers for over a decade. First with one for my wife who was putting on a lot of miles at the time. Eventually I went hybrid with my daily driver about 7 years ago as I was now driving more. The wife eventually went PHEV and is now on her second one. I’ve been thinking about a newer daily for myself and with ~7 years of ~40 mpg that became the new floor. Once the conflict started and it looked like we were in for a big increase in gas prices I made the move to a PHEV, identical to the wife’s except for color. So yeah I’d say I care a bit more about MPG and more importantly EV only operation than I did 5 years ago.
TBQ – Yes and no. My worry is more about diesel prices and the impact on the costs of goods like groceries. Gas prices near me are already back down to what they were last month before the spike, but I also have a very mixed fleet of cars and everyone in my household has a very short commute. The wife has a 1 mile drive to work, I have about 8 miles, my son goes about 4, and my other son goes about 15 each way. The short commutes really limit our overall fuel usage.
We have an EV and a PHEV that we can use to cut down on a lot of gas usage. The Miatae are pretty fuel efficent at 28 and 33 in mixed driving, but both take Premium that is still around $5 a gallon. The truck and STS are guzzlers that are parked most of the time unless the truck is towing something. The STS just runs spare car duty at this point until my youngest actually gets his license.
Basically after I drove the LM002 at 18 my care for fuel economy was solidified.
The most fun cars I’ve ever driven are electric or are ICE that get great fuel economy
Always have. I bought my 2012 Cruze Eco with fuel economy in mind. Then I sold that for a Model Y a few years ago. So I went good on gas to no gas. And am grateful every day to have been able to do that.
No, I don’t care about fuel economy more than 5 years ago, or 10, or 15…
Way back in 2002 we bought our first fuel efficient car. Traded a Nissan Frontier that averaged 15 mpg on a Jetta Wagon TDI that averaged 50 mpg. Since thing I’ve never really paid attention to fuel economy and never was without a vehicle in our family that got at least 45 mpg.
What today’s fuel prices have done is push more of our driving from the Acura to the Bolt. Before we used to take the Acura wagon on any trip that would require charging the Bolt. Today we take the Bolt and spend 15 to 20 minutes at a charger. Even at $0.50 per kWh it is cheaper to drive the Bolt and it is a nicer car to drive.
TBQ: On a daily basis, no. I’m fortunate to only have to go into the office twice a week and I can get there in 7 minutes if the trafffic lights cooperate. My existing car is paid off and is rated for 40 MPG highway.
On exceptional trips, yes. On Saturday I’m towing my race car 400 miles from San Diego to Monterey, and I was originally going to borrow a friend’s diesel Ram 2500 to tow, but I did the math and determined that it would be cheaper to use another friend’s gas Ram 2500 despite it getting lower fuel economy.
You have generous friends. No way I’d let someone borrow my truck to tow something 400 miles.
I do, but I have borrowed their vehicles before and have proven myself as extremely trustworthy. I tend to bring borrowed vehicles back in better shape than I got them.
I’m also “renting” a friend’s brand new hydraulic drop deck trailer. Same thing, he trusts me. Last year he asked for my help to move part of his car collection from one location to another, and tossed me the keys to his Ferrari 296 GTB and R34 Skyline GT-R with no hesitation.
I need to find friends like yours. 😉
Yeah, it’s very nice. I also store my $500 race car in said friend’s warehouse. It’s normally parked next to his 911 GT3.
Oh yeah. My Miata gets all the driving time right now. It’s tough to make decisions like “drive my Oldsmobile to the office” or “have steak.”
Steak? In this economy!?!?!
To be fair, he didn’t say what kind of steak. Perhaps we’ve gone from ribeye to sirloin?
One of the drawbacks of driving a 1960’s muscle car is that it automatically makes you crave a steak.
Even though I know that much red meat consumption is bad for me (and also the environment), I could eat steak almost every day. Before my current career, I was a meat cutter in a grocery store, so it was nice always having the chance to take the most well marbled or desired cuts.
Tube steaks, baby!
You made me smile and laugh, thank you.
The only other person on this planet I have ever heard use the term “Tube Steak” is my Dad. Usually when calling me out for saying or doing something stupid.
I like sirloin.
TBQ:
Yes, of course. It’s money out the door because of Executive Branch malfeasance. It’s absolutely pointless. My annual miles driven are relatively low, so it’s manageable.
I do have some morally questionable joy watching the surburban hillbillies filling up their late model lifted full size pickups now. They’re definitely feeling it. They’re also flying far fewer TRUMP flags than they were about a year ago.
Questionable joy?
I feel that the trend of lifted stanced out pickup with rubber-band-mud-tires has been accelerating.
They’re cheap now that they cost a small fortune to run. So the folks who always wanted one but couldn’t afford the price tag can now swing the purchase price. To discover the sacrifice involved to keep it running. Someone famous said something about fools and their money being quickly parted.
Financial stress is a real thing, I shouldn’t wish it on anyone even if I think they deserve it for supporting that guy. This isn’t the 6-figure contractor or business owner class driving shiny $80K commuter F250s.
Maybe sold the flag to buy gas?
Another bad decision, then. You sell when the market’s high! Not when approval ratings are 32%
Not a lifted truck, but this morning I was passed by a F350 dually diesel doing at least 85mph. And this is in a sparse area, so he was definitely driving 20 miles or more.
This past weekend my parents drove a 2000 Chevy Silverado 200 miles instead of their 2024 RAV4 Hybrid. With an empty bed, no reason at all to take the truck besides my dad likes to drive the truck.
Conclusion – gas isn’t expensive.
I noticed the Trump flags had disappeared in rural Michigan when I was home to visit family back in June.
Honestly, it’s worth the extra fuel cost to not see that anymore.
Doesn’t bother me either way. Flag flying never made much sense to me. Neither does getting attached to a sports team.
I hope you added a few Trump “I Did This!!” stickers to the gas pumps.
Matt, In the End, your Hybrid Theory will not be Forgotten. With Runaway fuel prices, the only Cure for the Itch of low gas pump bills is Crawling into a Hybrid. I may be By Myself on this one, but that we are One Step Closer to EV and PHEVs taking over.
Man, you’re really Linkin those thoughts together.
Yes, because five years ago I did not get to feed a 1983 Ferrari.
I feel like I’ve always cared about fuel economy. My first car, a Tercel wagon, got low 30’s, my Civic HX got 35-40, and my C-Max gets 35 when just on gas, but being able to plug in at both work and home, I’m going several months between fill-ups.
It’s possible that the days of Americans buying gas guzzlers under the assumption that fuel will always get cheap again are over. Good.
Not so good is that it took a fuel price spike with no clear end in sight and the knowledge that it can happen again overnight to reach this point. If we piss off Iran, they can close the strait and trigger a global economic crisis. The US/Israeli idiotic attempt to bring down the Iranian regime has made them stronger than ever. They’ve proven they have leverage and you’d better believe they will use it again.
I’ve always made fuel economy a high priority when car shopping. My current car gets 26-32 mpg depending on the season. When it’s time to move on I don’t see myself considering anything that doesn’t get the gas/electric equivalency of at least 40 mpg. I don’t tow, I don’t overland, all I truly need from a car is for it to run every day and not burn a hole in my wallet.
Unlikely. People say the US car buyer will learn to value fuel economy every time fuel prices spike but then they forget again once they drop.
We won’t ever see gas prices drop to what they were at the beginning of the year, even if they drop below what they are currently. Hormuz belongs to Iran now.
Never is a long time.
That polish and restoration of the top of the Chrysler Building is bad news for floor cleaning orphans everywhere.
5 years ago I had a Volt getting 38 mpg when on gas. Now I have a Volt getting 38 mpg and a Bolt using zero gas.
I don’t care more about fuel economy any more than I did 5 years ago. My car has been paid off since day one and is currently at 28.8 MPG. I am completely fine with that. I am DEFINITELY NOT replacing it with another car in this economy unless something major breaks with a repair bill that doesn’t make sense.
TBQ: having always owned small, lightweight cars…not really?
That’s pretty much me. Even the Crosstrek isn’t bad.
Yes I care more. I am looking to replace my kids 2016 kia soul now that it is near the end of its life and finding a decent replacement with good fuel economy is hard without spending a fortune or $10-20K for a car that is just as bad.
How is a 10 year old car near end of life? That kid must drive a LOT of miles.
3 qts of oil a week (KIA), transmission slipping to the point of not accelerating well and 180K miles. Load of hit and run damage from city street parking and attempted thefts. 1-2hrs a day commuting to 3 jobs.
A week?! How many miles is that?
Not sure but is like 10+ hrs of driving.
Wow that is a lot of oil consumption.
So not a lot of miles just a poor quality car.
It was the rugby team bus and sober cab for many years.
It’s not a 10 year old car, it’s a 10 year old Kia.
Less flippantly, I’m guessing his has the lousy GDI engine generation that blows through oil on its way to an early expensive death
Yes this!
True. My 2011 Acura burns a quart every 6 – 7,000 miles and I think that is bad. My Toyotas never needed the oil topped off between 10K mile oil changes.
TBQ: 100% I do. That quote in today’s article about consumers in the past viewing high fuel prices as temporary and just buying what they wanted, but now factoring fuel costs in, describes me very accurately. My next vehicle, will either be a stick or a hybrid. And since my wife’s car is looking like the one to be replaced, it will almost certainly be a hybrid.
After learning more about hybrid technology, I’ve been convinced that they just make for a better vehicle overall, not just in the area of MPG. Smooth power deliver, simpler transmissions (eCVTs are elegantly simple), eAWD, less break wear, being able to run the climate control with the engine off, are all things I find to be better than a standard ICE vehicle for daily use.
Looks like you’re getting a hybrid. Good luck finding a stick.
Civic Si would probably be what I’d end up with if I was the one who needed a car. Maybe a 10th gen Accord Sport 6MT, but those are already getting a little old for how much people ask for them, especially when a Civic Si really isn’t that much smaller.
I’d consider an Elantra N if it wasn’t ugly as sin. GR Corollas are too expensive for what you get, although one would be a ton of fun.
I believe the current Hybrid Honda Civic is faster than the current Honda Civic Si.
Hurts to see/say, especially considering that Honda knows how to make a manual hybrid car.
It is. I haven’t driven either, but those would both be very near the top of my shopping list. An AWD Prius could be interesting too.
Yes, hybrid are just better cars than on with a traditional gas engine. Especially ones with a whole bunch of needless complication chasing tiny fuel economy improvements instead of just going hybrid.