It seems like almost daily now oil is reaching and breaking its previous days records. For us that means no end in sight to the sky rocketed gas prices. Who's to blame for this run up?? Every one is pointing fingers at one another, from the producers to the refiners to the distributors to the futures traders and finally to the end users US. I would say we have dug our own grave on this one...hold on there for a minute before you start sending me hate mail, here me out. We the people of the United States have become so heavily reliant on oil, and more importantly foreign oil, that we cant function with out it. Not only can we not function with out it we have shown recently that we can't even trim our usage. I am guilty as charged on this one. I am not here to point fingers at everyone else but I do think it is something I need to start coming to grips with and so for me to blog about it and get it on the table may do me some good. A few years ago when gas was "cheap" I decided I wanted to get my wife the safest car I could find. I in turn thought safest meant biggest so I went online and bought her a Hummer H2.
She has loved driving the Hummer with our 2 boys Zayne (in the picture saying hi from the back seat) and Cooper and she has always felt very safe especially during our Utah winters. Recently our conversations about gas prices have us considering selling the beast and slimming down our fuel waistline if you will by going with a Hybrid or at least a more fuel efficient car.
BY THE NUMBERS
I am a numbers guy and after running the numbers it doesn't seem like the best move to dump the Hummer right now as we would have to almost pay someone to take it off our hands. That got me thinking, there had to be another option out there? And then it was a brother in law that said "you should convert it to Natural Gas". Like I said I am a numbers guy so I started looking into the numbers and this is what I found. $12,000 for the conversion...ouch right, well maybe not lets look a little closer. Up to $2500 tax credit (not write off but credit means cold hard cash) from the Feds, up to $2500 credit from the state of Utah, and up to 1/3rd of the actual cost from a gift or grant from a non-profit clean air organization. That leaves me holding the bag for somewhere between $3,000 - $6,000 depending on what I get approved for. At 13,000 miles a year and getting approximately the same gas mileage (11 mpg) it would take me about a year and a half to recoup the cost of the conversion. All the while I would feel good paying $16 for a fill up that is costing me $80 right now.
THE SOLUTION
I don't know if anyone has the magic answer to this fuel crisis and yes I am calling it a crisis. More off shore drilling and exploration in Alaska would help (a little) but with demand in countries such as India, China and the former Soviet Union increasing daily we would be kidding ourselves to think that this increase of a couple hundred thousand barrels a day would really solve anything. Instead I think it is up to us to park the gas guzzlers more, stay closer to home for vacations this year, and take the smaller car more often if you have one in your household. I will let you know if we make the change to Natural Gas with the Hummer anytime soon, just the thought of a $16 fill up really excites me.
More on Mortgages this week I promise,
Stetson The Mortgage Insider www.utahloantips.com
Post your comments on what some of your solutions might be.
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