Saturday, May 9, 2015

Gas Prices and Buying Cars with Stock Trading approach - kind of 

What happened to gas prices here in California? I had to fill up last night and pay over $4.00 per gallon. I used to pay around $24 for full tank and last night it was more than $35.
When gas prices were around $2.30/gallon just recently, did you buy your favorite truck or SUV that you always wanted or you ended up buying an economical car?
Here in America, cars are part of day to day life and the crucial part of our economy. We don’t buy economical cars because we want to; we buy economical cars because we need to, or because you grew up around somebody driving economical cars (like me) and it is engraved in you and your subconscious does not let you pick otherwise. Car enthusiasts in America are spread among sports/sporty Japanese cars, sports/sporty American cars, luxury cars fully loaded, foreign and American trucks, low riders, and etc. As a car enthusiast, you belong in one of these categories, but I am sure at the end of the day we would like to have one of each ☺.
Let me get back to my point. If gas prices and fuel consumption levels matter to you for economical reasons or personal beliefs, you/we need to be smart about it. When I was in Europe years ago, and friend of mine jokingly told me: “It does not matter if the gas prices go up. I always put 20 Euros in my tank and that’s it”. This is a funny statement, but it is true. Our friends in Europe put in the tank as much as they can afford and they drive as much as they can afford. Luckily, they have good public transportation. A few years ago, I asked a friend of mine here in California: Why did you buy a truck if you see that gas prices are climbing? He responded with: “I budget $300–$400 for gas per month and then I don’t feel bad about spending so much for gas”. This is true for a lot of people who can afford to budget a substantial amount and not worry about it again, but there are a lot of people who cannot afford high gas prices and they live in cities where public transportation is nowhere close to European or Japanese standards.
If you want to save money in the long term and you are in the market to purchase, you need to be patient and watch the trend of gas prices and the prices of economical cars. This is very similar to stock trading. You need to know when the prices of gas are at its bottom within last 12 months and then purchase an economical car. The prices of economical cars during the period of low gas prices is the most optimal.
I happened to buy a 2008 Honda Fit for $8,700 about 6 months ago. I was lucky. The gas prices were very low and at the same time, I was so tempted to get a Toyota FJ Cruiser because I always wanted some type of a tough truck/SUV. I’ve always owned economical cars that I would modify to my specifications and still have fun with them. As I mentioned at the beginning of this article, the gas prices are back to $4.00+ and based on a quick search, 2008 Honda Fit is being sold for $10,000 to $11,000. In theory, I could sell my car and maybe make some money on it ☺.
Watch the trends of gas prices and try to live with your current car until you determine that gas prices are low enough and that economical cars are NOTon demand and about to be on demand.
This is what I mean by following the stock trading approach. We observe when economical cars lose popularity due to low gas prices and then you buy an economical car. Don’t just buy any economical car; there are plenty of choices; you can test-drive as many cars you want and determine which car will give you that good combination of fun factor (whatever that means to you) and MPGs. Have fun exploring, driving and be safe.
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#cars #carreview #gas #gasprices #economical #MPG #gasmileage #fuelconsumption #fueleconomy

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