Car rates

Carpooling, queuing for Costco gas, and no longer driving the grandkids. How Americans are coping with rising gas prices.

In an era of record high gas prices, many Americans have a particular number in mind. It is a number that upsets their routines and becomes a source of disbelief, fear and anger.

For Tracy James, a healthcare industry recruiter in Pensacola, Florida, that figure is $57. That’s what she paid on Sunday to fill up her Nissan Altima, when it was already a quarter full. Fear crossed her mind when she saw the price: “If it’s more than that, what are we going to do?

James, 52, had a labor of love packed into his work schedule – a drive from one side of town to the other to pick up or drop off his grandson at his pre-kindergarten class two or three times per week. It’s been about two weeks since she did. “I was not able to help as I was. It’s a pressure on us as a family to have to do this,” she said.

“If it’s more than that, what are we going to do?” Tracy James thought about the gas pump recently, when it cost $57 to fill up her Nissan Altima from a quarter full tank.

Photo courtesy Tracy James

For Teaneck, NJ resident Danny Reyes, the number is $61. That’s what he paid on Monday to fill up his Kia Sorrento. “I was like ‘Oh wow,'” the part-time Amazon AMZN said,
+2.40%
pilot with his own blog, Swaggerdad.com. “My head turns.”

Reyes’ SUV lease ends at the end of 2023. He is already researching electric vehicles. Over the weekend, he started carpooling with a pal to their long-running Saturday morning football game in Manhattan. When his friend brought up the idea of ​​carpooling to try and save money, Reyes, 51, was an easy sell. “I was like, ‘Say no more.'”

Carpooling for his son’s basketball practice started before the price spike as a nod to time management, but Reyes said shared rides are more important now than ever.

“Now when we go to places we calculate whether it’s worth it or not,” Danny Reyes said. He recently spent $61 to fill up his car in New Jersey.

Photo courtesy Danny Reyes

For Moises Godoy, an English teacher in suburban San Diego, California, the scary figure is around $130. That’s what he paid on Tuesday to fill up his Chevy GM,
+5.17%
Silverado. In fact, Godoy first paid $12 to get two gallons out at a nearby gas station. That was enough to make him come to the Costco COST discount store,
+0.82%,
and his cheaper gas prices, where he paid the $130. Godoy had to wait in line for 35 minutes because many other drivers had the same idea of ​​where to get the best value.

“It’s not okay. It feels like being robbed,” said Godoy, 51. He says he needs to be a lot more “intentional” now about when and where he drives, grouping tasks and trips together in the name of conserving fuel and money.

‘It’s not right. It’s like we’re being robbed,’ said San Diego resident Moises Godoy. He recently stood in line for over half an hour for relatively cheap gas at Costco.

Photo courtesy of Moises Godoy

For two years, the COVID-19 pandemic has forced many Americans to think hard about where they have been and how they are living their daily lives. More than two weeks after Russia invaded Ukraine and sent crude oil prices soaring, they are increasingly factoring gas price hikes into their decisions as the number of infections in the COVID-19 is decreasing.

The price hike comes at a time when decades-high inflation rates persist — and more and more employers want their workers to commute so they can be physically back in the office.

When do gas prices affect behavior?

On Wednesday, AAA said the national average for a gallon of gasoline was $4.25. A day earlier, prices broke the all-time high of $4.11, set in July 2008.

When the price of gas hits the $4 mark, drivers increasingly think about fuel-saving tactics like cutting back on trips, bundling chores and carpooling. When they exceed $5, drivers increasingly follow these metrics, a AAA spokesperson said.

Consumer purchasing power and fuel-efficient vehicles may moderate some of the price shocks, some say. But the gas price figures that people see and pay for regularly carry psychological weight, said Carola Binder, professor of economics at Haverford College.

“When the price of gasoline rises, consumers become more pessimistic about the overall economy,” said Binder, who studied the interaction between Gallup polling data and retail gasoline prices.

Drivers have yet to start limiting car trips

From there, the question becomes how much driver behavior will change, how long that will last, and how much consumers will have to dip into their wallets.

So far, rising gas prices are not translating into fewer car trips, said Bob Pishue, transportation analyst at INRIX, a traffic and mobility data analytics firm. Nationally, vehicle trips were up 20% last week from a January-February 2020 baseline, according to Pishue. “If it had any effect, it had a relatively small effect on driving,” Pishue said.

What will happen in the future remains to be seen, he noted. But if current driving patterns continue amid higher gas prices and more people drive to the office, the result will be more people paying more money for gas, Pishue said.

Transportation costs have long been the second largest part of household spending, according to data from the Department of Agriculture. Housing is the biggest chunk, accounting for about a third of spending, from 1997 to 2020, the data shows. Transport costs have varied between around 19% and 15%, with transport costs in 2020 representing 16% of household expenditure.

Food, the long-standing third expense, accounted for 11.9% of household budgets in 2020, the data showed.

Keep in mind that the 2020 numbers don’t reflect the impact of months of skyrocketing inflation in 2021 and 2022. In January, the cost of living rose 7.5%, according to Bureau of Labor data. Statistics. Gasoline prices jumped 40% year-over-year that month.

If travel reduction isn’t showing up in the large-scale data yet, that doesn’t mean it’s not happening.

Nearly half (45%) of drivers said they were shortening their driving distances to cope with rising gas prices, according to a recent Autoinsurance.com poll of 1,520 people from European countries, United Kingdom and the United States (just over 500 survey participants were American).

Reyes said he and his wife enjoy enjoying the views and walks in a New York state park about 40 miles north. That’s not happening right now, he said. “Now when we go to places, we calculate whether it’s worth it or not,” he said.

In Pensacola, James and her husband enjoy traveling when they can, sightseeing and dining out. Something like a recent three-hour drive to Birmingham, Alabama, would now be off the table, she said.

The real hurt comes from skipped trips to see her grandchildren. It’s a particular pain for a woman who wants to be there as much as she can for her daughter and son-in-law, as well as her 4- and 8-year-old grandsons, both of whom have special needs. Her 8-year-old grandson is homeschooled and James has also – until recently – been able to bring her over occasionally to help with homework and put some variety into her week. .

The good news is that her daughter and son-in-law plan to get much closer to her in the spring, James said. Rising gas prices helped their decision to move, James said.

But that’s when and James has to stick to his budget now. “As a grandparent, it really makes you feel like you’re not adequate enough. … It’s kind of depressing, I can’t do this right now.