The Republic of T.

Black. Gay. Father. Vegetarian. Buddhist. Liberal.

Poor SUV Owners

I’ve picked on SUV drivers a few times on this blog. To tell the truth, it’s been too easy. Despite their best — and most hilarious — efforts at over-compensation, and attempts to pump them up with government subsidies, sales are down. You can hardly blame them for having a bad case of what I call “Prius envy.” It’s almost to make you feel sorry for them, but that’s not quite what I mean by “poor SUV drivers.”

Americans’ love affair with 22-inch rims, eight cylinders and four-wheel drive wrapped in an 8,000-pound package is over. And the breakup is going to cost.

With $4-a-gallon gas coming between drivers and their very large vehicles, consumers are dropping their once-beloved rides, fast. But not fast enough, it seems. As the price of gas has gone up, the value of sport-utility vehicles has gone down.

In the past six months, the price of a used Chevrolet Suburban has dropped as much as $8,000, said Mike Parker, manager of used-car sales at Lustine Toyota/Dodge in Woodbridge.

For those determined to swap their fuel-thirsty behemoths for gas-sipping subcompacts, the glut increasingly means taking a financial hit. In the worst cases, declining SUV values leave owners owing more money to the bank than their vehicle is worth.

The question they face is: Which is worse for the wallet — the cost of gas or the money lost selling the vehicle?

That’s gotta hurt.

But what are you gonna do when it costs $100 to fill your tank these days?

07-07-08_1728

With gasoline prices high and rising, a new financial milestone has arrived: the $100 tank of gas.

Bryan Carisone, a heating and air-conditioning contractor in Raritan, N.J., “absolutely loves” his new GMC Denali XL, an extra-large sport utility vehicle with televisions built into the leather seats. But in June, one week after he bought it, he pulled into a station on a near-empty tank and watched the total climb higher and higher — to $109.

“It just about killed me,” Mr. Carisone said.

For decades, the $100 barrel stood as a hypothetical outlier in doom-and-gloom conversations about future oil prices. And nobody could even imagine an American family paying $100 to fill the tank.

But the future is here. Oil passed $100 a barrel in January and now seems headed toward $150 a barrel. Gasoline prices surpassed $4 a gallon on June 8, stalled for a while, and have been rising again in recent days, setting a record Saturday.

By late spring, owners of pickups and sport utility vehicles with 30-gallon tanks, like the Cadillac Escalade ESV and Chevrolet Suburban, started paying $100 or more to fill a near-empty tank. As gas prices continue to rise — the national average stood at about $4.10 a gallon Saturday — membership in the triple-digit club is growing. Now, even not-so-gargantuan Toyota Land Cruisers and GMC Yukons can cost $100 to fill up.

Data on exactly how often people pay $100 for a tank of gas are scarce, given price variations from market to market and day to day. But during the first five months of 2008, about 11 percent of American drivers said they bought 24 gallons or more at their last fill-up, according to a survey of 81,000 drivers by the NPD Group, a market research firm — which at today’s prices would place many of them at or around $100.

For people who love their big vehicles, the pain is acute.

It’s a pain that also happens to be unecessary. Or at least it was something that could have been avoided.

I remember standing in front of the television, just a few weeks after 9/11, shaking my head at advertising that all-but-said it was our patriotic duty to buy a truck or SUV.

The nation’s No. 1 auto maker, General Motors, is running a campaign infused with patriotic elements to promote a zero percent financing program. A TV commercial began with an announcer reciting: ”The American dream. We refuse to let anyone take it away.” A print ad ended with these words: ”This may very well be the most serious crisis our nation has ever faced. In this time of terrible adversity, let’s stand together. And keep America rolling.” Indeed, ”Keep America rolling” is the theme of the campaign.

”It’s a fine line between calling the program what it is and going too far,” said C. J. Fraleigh, executive director for advertising and corporate marketing at General Motors in Detroit. ”I think we struck the right balance.”

”The auto industry is a major component of the U.S. economy and we’re the largest company in the industry,” he added. ”The size and history of G.M. gives us a legitimate license to talk about our role in the economy. It is appropriate, again, if you don’t cross the line.”

Mr. Adamson of Landor agreed that the patriotic appeals may work best when, he said, ”it is relevant to the core brand idea.”

”Major League Baseball has done a terrific job of wrapping itself in the flag,” he added, referring to television commercials, ”and it works, because baseball’s core is American.”

Even so, ”over a period of time, its relevance diminishes,” Mr. Adamson said, ”as consumers begin to ask what does it have to do with the brand.

”And that could do damage,” he added.

I don’t remember if it was a GM commercial, but I remember one that featured a bevy of gas guzzlers, billowing flags, and an enthusiastic chorus singing, “Keep on rollin’! Keep on rollin’! Woo, hoo, hoo!” I shook my head, because it seemed clear that people didn’t get it, and were absolutely committed to not getting it. The president did tell us tha that the best thing we could do for our country in that moment of crisis was to go shopping (read, acquire more debt), but the last thing we needed to do was increase our oil dependency by purchasing even more fuel-inefficient vehicles. The last thing we needed was for the government to subsidize the sale of those vehicles.

But that’s exactly what we did. And we acted as if there wasn’t a price to pay somewhere down the road.

Ninety percent of Americans, meanwhile, expect the pain at the pump to pose a financial hardship in the next six months, according to a recent Associated Press-Yahoo News poll. Stocks now trade inversely to crude prices, and the Dow Jones industrials are in bear-market territory. Old icons have been written off, with Starbucks boasting nearly twice the market value of General Motors, which some on Wall Street say faces the possibility of bankruptcy.

Outside the thriving oil patch, it makes for a bleak economic picture. But it didn’t have to be this way.

Over the last 25 years, opportunities to head off the current crisis were ignored, missed or deliberately blocked, according to analysts, politicians and veterans of the oil and automobile industries. What’s more, for all the surprise at just how high oil prices have climbed, and fears for the future, this is one crisis we were warned about. Ever since the oil shortages of the 1970s, one report after another has cautioned against America’s oil addiction.

Even as politicians heatedly debate opening new regions to drilling, corralling energy speculators, or starting an Apollo-like effort to find renewable energy supplies, analysts say the real source of the problem is closer to home. In fact, it’s parked in our driveways.

SO despite the fierce debate over what’s behind the recent spike in prices, no one differs on what’s really responsible for all that underlying demand here for black gold: the automobile, fueled not only by gasoline but also by Americans’ famous propensity for voracious consumption.

…To be sure, the American appetite for crude oil is only one reason for the recent price surge. But the country’s dependence on imported oil has only kept growing in recent years, undermining the trade balance and putting an added strain on global supplies.

Although the road to $4 gasoline and increased oil dependence has been paved in places like Detroit, Houston and Riyadh, it runs through Washington as well, where policy makers have let the problem make lengthy pit stops.

“Much of what we’re seeing today could have been prevented or ameliorated had we chosen to act differently,” says Pete V. Domenici, the ranking Republican member of the Senate Energy and Natural Resources Committee and a 36-year veteran of the Senate. “It was a bipartisan failure to act.”

Mike Jackson, the chief executive of AutoNation, the country’s biggest automobile retailer, is even more blunt. “It was totally preventable,” he says, anger creeping into his affable car-salesman’s pitch.

…Though analysts say automakers who shoveled out highly profitable and highly inefficient road hogs like S.U.V.’s and pickups deserve much of the blame, they also criticize legislators who failed to provide an incentive for consumers to switch to fuel-sipping cars. Some politicians are quick to acknowledge the problem.

“We’ve got to fix it or our standard of living will change within a decade,” says Senator Domenici, who is retiring this year. “Oil was too damn cheap, it’s too high now and it’s going even higher. I hope I’m wrong, but the problem is, we can’t catch up soon enough.”

We can’t catch up soon enough?

That’s right. “We.” Because the truth is, no matter what we have in our driveways —even if we don’t own a vehicle at all — we all SUV owners in a way And we’re all paying for that, on way or another.

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