Cost of Operating a Car Now Averages $150
Well it's yet another post concerning gas prices, but this one is a little different. The is an all encompassing average for not only the gas prices, but the maintenance and any other costs concerning your movement from one place to another in your personal automobile. Gas prices are only a portion (though a considerable portion) of the total cost of operating a vehicle. Maintenance, insurance, tires, fees, and taxes are also included in the total cost. One thing that I've noticed is a surge of insurance company commercials showing deals and making service better for their consumers. This could be related directly to gas prices and people trying to make their average cost of driving go down by any means necessary, even changing their insurance policies. Though fuel prices will always be a primary cost for driving, I can see the potential demand for lower costs in other more flexible areas of auto-related costs. What do you think? Would there be a demand for lower maintenance and tire prices? Maybe lower registration and taxes for automobiles or more tax breaks for hybrid and non-polluting alternatives? Will people give up cars all together as this cost rises and go for alternatives such as mass public transportation?
1 comment:
Robert, your use of the term "demand" is awkward in several spots in this post. When you say that "the potential demand for lower costs..." and "would there be a demand for lower...tire prices" I think what you are trying to say is that competition among, say, tire producers, will result in lower tire prices for automobile owners. That is, it's increased supply that would drive down tire prices.
Secondly, tax breaks for hybrid cars would not decrease the price of such cars. A tax break is essentially a subsidy to buyers. Such tax breaks will stimulate demand for hybrids, thereby bidding up the price of such cars. The analysis is very similar to the analysis of the burden of a tax. In this case, however, the buyer and sellers will share the tax break: buyers will end up paying a lower net price, while sellers will get to keep a portion of the subsidy through higher market prices.
Post a Comment