Photo via: Kevin Dooley
It has been a pretty depressing week in the automotive world. Not only has GM announced its possible plans for a quick bankruptcy, but it has also experienced a media leak announcing the recall of 1.5 million vehicles due to engine fires. In other news, reports on summer gas tell us to expect price to remain in the low $2 range, but the smaller vehicles that would have been able to take the best advantage of this, have been slammed by the IIHS as being twice as likely to cause death in an auto accident.
Rumors of GM recalls are in effect for the 3.8 liter 1997-2003 Pontiac Grand Prix, 1998-1999 Oldsmobile Intrigue, 1997-2003 Buick Regal, and 1998-2003 Chevrolet Impala, Lumina, and Monte Carlo. Government reports indicate that oil drips around the engine could pose a fire hazard if the oil was to splash on the exhaust manifold. This news has sent many owners into a panic as the news of GM's looming bankruptcy was also a popular headline today.
Government officials are telling the public not to worry, as they are guaranteeing all previous and future warranties of GM to the tune of some $70 billion that will be acquired throughout their liquidation process. In addition, the government has taken order to some 17,600 U.S. made fuel efficient vehicles in the attempts to throw The Big Three a bone. Most importantly however, officials are telling us that we can continue looking forward to seeing the Chevy Volt make its appearance in November of 2010, and it promises to stick around whether it makes money or not (they can thank our tax dollars for this little piece of good news).
Gas Prices and Small Car Crash Tests
The Energy Information Administration (EIA) perked our attention today, concluding that gas prices should remain around $2.23 a gallon throughout the summer months. They are also expecting another 2.2 percent decline in gasoline usage to be tacked on the 6.1 percent decline from last year. $53 a barrel crude oil prices will remain fairly steady, with an expected increase of $10 by 2010. Two scenarios which could drastically alter these prediction are a swift economic recovery, or the decreased oil production due to the aggressive action of the OPEC cartel (the second scenario being the most likely of the two).
The Insurance Institute for Highway Safety (IIHS) has fueled the fire on previous reports claiming small, economical vehicles are not as safe on the highways as larger vehicles. Their newest report compared the collision results of a Honda Fit, Toyota Yaris, and Smart Fortwo, with a Honda Accord, Toyota Camry, and Mercedes C-class. Unsurprisingly, they found the lighter vehicles took the worst of the impact, taking on air, spinning around in circles, and causing significant damage to the test dummy. What all this means, is we can expect increased insurance rates for economy class vehicles despite their low cost, low speed, and plethora of safety features (not a particularly kind blow to the green, economy class of vehicle).