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Why is the price of gas and diesel fuel so high?

From :  Lubinsky, Paul <plubinsky@homac.com>

Sent :  Wednesday, March 31, 2004 1:00 PM

Subject :  High gas prices

 

 

              Why is the price of gas and diesel fuel so high?

My Opinion

 

You listen to the News and they can't seem to nail down the cause. I'm

tired about hearing that the price of gas is out of control. First you

must understand Fleet average and the fines that are levied towards the

auto makers and then passed onto the consumer. This old link on fleet

average might help you understand this.

http://www.nhtsa.dot.gov/cars/problems/studies/fuelecon/ The price of

gas is not controlled by the people you might think, If you give it some

thought you would come to realize that basically the only place you use

gas is in a car or Truck. The price of diesel fuel is also inflated to

discourage the consumer from buying a diesel powered vehicle, European

competition. Why would the auto makers want to control the price of gas

and diesel fuel you ask? Well if they control that than they control

what you buy. Here is the way it works, example, in some city the

dealers are having trouble selling Cars because people want Trucks and

SUV's, this messes up the fleet average so to stop consumers from buying

Trucks and SUV's they raise the price of gas this steers the consumer

towards the more fuel efficient Cars and if they prefer you to buy a

Truck they lower the price of gas. This is the reason that gas pricing

is different from town to town and state to state for no apparent

reason.

While on the subject of Cars and trucks I am appalled of the fact that

they are so overpriced. Do you realize that for a production vehicle Car

or Truck it costs $1.40 per lb. to build, this includes all overhead,

shipping, benefits and payroll. Now if you double this price for their

profit that is only fair and tack on a respectable 20% for the dealer

that comes out to $3.36 per lb. a fair price. They know that the buyer

is easy to mislead with "come in and you will get cash back" this model

sells for one million twenty seven thousand dollars and we will give you

"one million dollars cash back" so you only pay twenty seven thousand

dollars for a twelve thousand dollar vehicle what a deal. People you

don't get anything back! Keep in mind car dealers are not capable of

telling the truth when dealing with them. Did you know that the dealer

pays 50% of the sticker price but the sales people are not aware of this

they are trained to sell, remember they are trained to lie to you.

Did you know they even make you pay more than double for options?

Example I went to the Parts counter and priced out an automatic

transmission complete with torque converter, cost $900.00 a common

option when buying a new vehicle,

Then I priced out the standard transmission that comes as standard

equipment, with bell housing, flywheel, clutch, pressure plate, throw

out bearing and peddle, cost $1300.00

So if I order a Car with an automatic transmission I should get a

$400.00 rebate not over a $900.00 option.

It costs about $300.00 for the wheels and tires that come standard on a

vehicle and the option is about $500.00 . If you go to the tire shop and

get an estimate  on a comparable set of tires and wheels it is also

$500.00 where is the credit of $300.00 for the stock tires and wheels

that came with the vehicle?

There are other examples like the difference between a 4 cylinder engine

and a 6 cylinder is $200.00 and from a 6 cylinder to an 8 cylinder is

$200.00 also. The radio is another example the car comes with a radio

that you would like to upgrade so they sock it to you again, They charge

more than the upgrade is worth and you still paid for the one that came

with the vehicle. Visit the a car audio center and check it out.

It costs the same to build a luxury vehicle as it does a less expensive

model you are just tricked into thinking you get more. Think about it,

Does the vehicle last longer? Does the radio get more channels? Does the

heater get hotter? Does the AC get colder? Does it get better gas

mileage? No, it just costs more. Take a piece of paper and roll it into

a tube. Take another piece and fold it a couple of times. The auto maker

would have you believe that the one you want should cost more.

With that in mind next time you see one of those 2 seat sports cars

remember $3.36 per lb. or about $8,000.00 is what it is really worth.

Remember when buying a new car keep this in mind, what you think you can

afford minus $120.00 per month for insurance. One more thought if you

invest in a piece of land and pay it off in 5 years you now have a down

payment to build your dream house instead of a five year old car your

still making payments on and now needs repair.

What is with the automobile companies and their time machines? It seems

they can make next years models and bring them back and sell them this

year. Does that mean you pay full tax this year and again next year?

If you ask me I think that we should stick together and not buy

a New vehicle for at least 3 months. This would lower the price of gas

and lower the price of a car by at least 40%. I think it is long over

dew that the price of a vehicle should be adjusted, remember $3.36 per

lb. at the dealer.

 

 

 

Paul L.

 

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