Car Buyers Can Find Bargains on Year-End Models
By Kimberley Edgar
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| Got your eye on a 2008 Chevrolet? As dealers look to clear their lots of ‘08 models, you may find a bargain. |
It used to be dealers would cover their windows when they rolled their new-year models onto the showroom floor to be unveiled the next day.
When the curtain opened, people would feast their eyes on the gleaming paint and sparkling chrome of the freshly redesigned automobiles. Traditionally there were deals to be had in October as the salespeople pushed the older models out to make room for the new.
Today, the new model year doesn’t have the same drama and impact it once had – it’s not unusual to see a new-year model introduced in January or February.
But there are still bargains for those who are looking for them throughout the month.
“There are dealers who want to clear their lots. There are some vehicles due for a fairly major redesign, and if someone is happy with the old design this could be the time to buy,” said John Paul, AAA’s Car Doctor.
The dealer won’t sell the car for less than the dealership paid for it, but manufacturers provide incentives, which is what makes the deal attractive.
Mr. Paul suggests buyers ask about dealer incentives in addition to customer incentives offered through the manufacturer.
“They may be willing to share,” he said.
And the later in the month – and year – a buyer buys, the better the opportunity to capitalize on additional savings as salespeople looking to make their sales goals tend to be more forgiving toward the end of the month.
The people who most benefit from these year-end deals are those who plan to keep a vehicle for five to 10 years and don’t mind choosing from leftover stock.
But Mr. Paul advises buying models at year’s end might not make sense to those who turn in their cars about every two years because if they buy late into the model year, the vehicle already is a year old.
For anyone shopping for cars before year’s end, Mr. Paul recommends looking at the next year’s model to see what features are included as standard equipment. What might be an option in 2008 could be included in the base price in 2009 and translate into a better value.
Buyers will find two-fold savings in this down economy: In addition to more competitive pricing toward model-year’s end, slower sales are driving prices down.
“It’s definitely a buyer’s market,” said Gerry Zeoli, AAA Financial Services Director. “It’s fair to say most dealers have an excess or abundance of inventory, and they need to move those so they don’t pay recurring floor-plan charges, which are monthly charges the dealer has to pay to the manufacturer for vehicles kept in inventory.”
To add to this dynamic, this year auto-loan interest rates have hit their lowest mark this year and remain low.
Mr. Paul recommends anyone faced with choosing between taking a rebate or a low-interest loan or financing through a dealership opt for the rebate and go elsewhere for financing.
At AAA, buyers can find financing for new cars for 60 months at 4.49 percent or lower at present time.
“They’ve probably reached as low as they’re going to get for the year. It’s a good time to act,” Mr. Zeoli said. 
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Tips for Buying Teen’s First Car
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| AAA can help you ensure the keys you’re giving your teen are to a car that’s safe, affordable, and reliable. |
With school back in session and parents resuming shuttle service between sports, extra-curricular activities and part-time jobs, many a teenager will make a winning appeal for his or her first car.
But, how to choose the right one? Teenagers and parents should consider together safety, affordability and reliability when making their decisions.
“Helping their teenagers make a smart vehicle choice is an important way that parents need to be involved in their young driver’s development,” said AAA President and CEO Robert L. Darbelnet. “Making a wise choice can more than just save the teen some money and repair headaches – it can save lives.”
Selecting the right vehicle can prove challenging as parents balance safety concerns, financial constraints, the teen’s preferences and their own emotions. Before choosing a vehicle, parents must determine if their teen needs a vehicle of his or her own.
“Parents should assess the maturity level and actual driving needs of their teen before beginning the search for a vehicle,” Mr. Darbelnet added. “Once a teen is ready for and needs a vehicle, buying that car presents a golden opportunity for parents to actively engage the teen in making a smart, safe vehicle decision.”
AAA’s “So Your Teen Wants a Car? A Parent’s Guide to Choosing a Vehicle” brochure provides parents and teens with important details to consider when in the market for a vehicle. The brochure emphasizes three categories to consider during the vehicle selection process: safety, affordability and reliability.
Safety
Automobile crashes are the leading cause of death for teens, and teens are more than twice as likely to be involved in a crash as adult licensed drivers.
Parents should consider vehicles with the latest safety features that can reduce the risk of a crash and the likelihood of injury should a crash occur. Such features include anti-lock braking systems, daytime running lights, electronic stability control, airbags and adjustable/lockable head restraints.
Affordability
Parents are encouraged to work with their teen to determine the best investment. A new vehicle may exceed the family budget, so a previously owned model with good safety features might be the best option. Insurance, fuel and maintenance costs should all factor into the decision-making process as well.
Reliability
Selecting a vehicle with a warranty, purchasing an extended warranty, checking the vehicle’s maintenance and crash histories, conducting a pre-purchase inspection and avoiding vehicles with excessive mileage are steps parents can take to ensure the purchase of a roadworthy and mechanically sound vehicle for their teen.
To download a copy of AAA’s “So Your Teen Wants a Car? A Parent’s Guide to Choosing a Vehicle” brochure, visit Horizons Online at AAA.com. 
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AAA Answers Some of Your Most Frequently
Asked Questions Related to Auto Tavel
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Q: What is the single best way to increase your vehicle’s fuel economy?
A: Modifying driving behavior by reducing speed is the best way to improve fuel economy. Reducing speed from 70 mph to 60 mph can noticeably improve fuel economy. Driving conservatively is also important. Gentle acceleration as opposed to heavy throttle for quick starts can also improve fuel economy.
Q: Is it more fuel efficient to use my air conditioner or travel with my windows down?
A: When at high speeds, it’s always better to keep your windows up to maintain your vehicle’s aerodynamics. When driving in stop-and-go traffic, there is a slight increase in fuel efficiency by cutting off the air conditioner and rolling down the windows. However, today’s air conditioning systems are much more efficient than in the past and do not put as great a drain on your vehicle as they once did.
Q: How much fuel efficiency do I lose when I secure items to my vehicle’s roof rack?
A: Anytime you put something on your roof rack, it creates more aerodynamic drag on your vehicle and will substantially reduce fuel efficiency. The amount of the decrease would vary based on the size of the object on top and the vehicle.
Q: If the owner’s manual says to use premium gasoline, will it damage the engine if you use a lower octane? Or do you only lose performance?
A: Not using the fuel octane level recommended by the manufacturer can decrease the performance of your vehicle and possibly result in a decrease of your fuel economy.
Q: With ethanol now blended into fuel, will it damage your engine or have other negative effects on your vehicle?
A: The amount of ethanol now blended into fuel – typically 10 percent or less – will not damage a modern engine. Since the 1970s, when what was then called “gasahol” was introduced, vehicles have been built to accommodate ethanol in their fuel. While ethanol delivers 25 percent less fuel economy when compared with an equal volume of conventional gasoline, a 10 percent blend of ethanol to 90 percent gasoline only reduces fuel economy by an estimated 3 percent while delivering other advantages including an expanded supply of available motor fuels.
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Not Easy for an AAR Facility to make the Cut
By Kimberley Edgar
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At least one member knows how reliable AAA Approved Auto Repair facilities are.
Jamie Winkler, of Brockton, Mass., saw how they not only ensure a vehicle’s overall health, but also can take the worry out of a vacation when his muffler came undone en route to the White Mountains in New Hampshire.
It was early in the morning, and with 200 miles to go, he and his traveling companions prepared for the worst as they tied the muffler and made it to the next exit.
But after calling AAA and being directed to the nearby 128 Tire, in Reading, Mass., the situation improved.
Although the owner had not opened for the day, he saw Mr. Winkler’s dilemma and told him to bring in his car.
Within 20 minutes, Mr. Winkler had keys in hand and was good to go.
“When I asked what the cost would be, he said not to worry, and told us to just enjoy our vacation,” Mr. Winkler wrote. “We were in a vulnerable position, and 128 Tire took what could have been a discouraging situation and turned it into a positive experience.”
It’s no wonder: Not every garage makes the AAA cut.
Requirements to become an AAR facility are stringent, and standards cover staff qualifications and training, customer service, facility appearance and community reputation. Here are some of the criteria:
• The shop must have been in business at least one year so AAA can review the shop’s track record by surveying a sampling of customers about their experiences;
• It must have an acceptable community reputation, determined by reviewing and analyzing past financial statements or equivalent reports, local or state consumer-protection-agency reports, or inquiries of randomly selected past customers;
• The garage must offer top-notch customer service with a qualified, courteous and efficient staff, and the waiting area must be a clean, safe and comfortable environment; and
• The shop must staff at least one Automotive Service Excellence-certified technician in each of the four main areas of service – engine performance, engine repair, brakes and electrical – and train employees to keep them current.
“The check sheet is elaborate because the program is an attempt to guarantee a certain level of excellence,” said Rich Iozzi, AAR Field Representative. “It gives consumers a consistent standard that is probably more rigorous and stringent than you would find in a licensing program.”
The AAR program, around since 1975, has become so widely respected that shops consider it an honor to be accepted and agree to regular inspections to ensure they continue to meet AAA’s quality standards.
“The customers believe in AAA. They respect the AAA name,” said Dan Fine, Manager of Park Avenue Auto Service, an AAR garage in Cranston, R.I.
“They have a certain trust here because AAA gives them that trust,” he added, “and that’s why I like being affiliated with AAA, because I pride myself on being an honest and trustworthy place for people to bring their cars.” 
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From Start to Finish: Auto Safety for the Life of Your Vehicle
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| Good safety habits are an important part of learning to drive. |
Automotive safety is much more than exercising caution while driving. Before you get behind the wheel, it’s important to take a driver training course or read up on vehicle reviews. Once you’re ready to drive, safe driving techniques and regular vehicle maintenance are critical to staying safe behind the wheel.
Here are some tips to consider:
Learning to Drive
Whether you’re learning for the first time or teaching a teenager the rules of the road, there are many things you can do to ensure safety:
• Start each practice session by checking out the vehicle. Adjust mirrors and seats, and check tires and warning lights and fuel and fluid levels.
• Before each practice drive, predetermine a route so you can avoid what may seem like last-minute directions. Target specific skills to focus on each session, such as turning, backing up, shifting gears, or parking.
• Limit early practice sessions to two hours during daylight and clear weather.
• Make sure you know the meaning of road signs and pavement markings, and be aware of potential hazards on the route.
• Slowly introduce different levels of traffic, from maneuvering in light traffic to maneuvering in moderate traffic. As you gain experience and knowledge, ease into more challenging situations like merging onto interstates.
Obeying the Rules
of the Road
We all know how important it is to obey speed limits and stop lights, but there are other things you can do to stay safe while driving:
• When leaving for work or an appointment, leave a few minutes early so you’re not rushed.
• Drive with your headlights on, even during the day, so pedestrians, cyclists, and other drivers can see you.
• Be aware of areas such as playgrounds that indicate children could be in the vicinity.
• Slow down in or near residential areas.
• Scan between parked cars and other objects for signs that children could dart into the road.
• Practice extra caution in inclement weather.
• Make eye contact with pedestrians who are about to cross the street. Be aware of their next steps and make them aware of yours.
• Make sure you know the law when it comes to using portable devices, such as cell phones, PDAs, or GPS units. The safest option is to refrain from using these devices while your vehicle is in motion.
• Avoid driving while drowsy, and never drive after consuming alcohol.
Keeping Your Vehicle
in Top Shape
Performing regular maintenance on your vehicle will not only extend its life, but will also make the vehicle much safer. In addition to regularly scheduled oil changes and other maintenance listed in your owner’s manual, don’t forget about these items:
• Make sure to check your tire pressure regularly. Over or underinflated tires pose a safety risk and can cause serious damage or injury if they fail while driving. AAA recommends checking your tire pressure once a month, even if your vehicle has a built-in tire-pressure-monitoring system.
• Replace your windshield wipers regularly. Rain and snow decrease visibility while driving. If your wipers are not in good condition, the problem only gets worse.
• Check and refill washer fluid. A clean windshield is necessary for you to see all potential threats while driving.
• Have cracked windshields fixed or replaced as soon as possible to avoid further breakage and possible injury.
Automotive safety begins before you even start the engine.
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People Are Driving Green for the Planet — and Their Wallets
By John Paul, AAA Car Doctor
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| The Nissan Altima is one of 24 hybrids on the market. |
I was talking with a friend the other day about his new Prius. I asked, “Why did you buy a hybrid?” His answer: to be green — in his wallet!
Some buy hybrids to save money and some to save the planet. If you fall into either category, you have more choices than ever: There are 24 models of hybrid cars and trucks on the market.
And it’s not just hybrids — gasoline engines are shrinking and gaining fuel efficiency. Once, an 8-cylinder engine produced 300 horsepower and barely got 15 miles per gallon. Today, some 6-cylinder engines have at least as much power, with better fuel economy and lower emissions. Then, there are the new generation of clean diesels, and small, fuel-efficient cars that may be perfect for city drivers.
Here are some environmentally friendly options:
Hybrid
Hybrids combine an electric motor with a gasoline engine to maximize fuel economy and lessen emissions. Unlike electric cars, hybrids do not need to be plugged in to recharge the battery. Prices range from $21,000 for a Honda Civic or Toyota Prius to $103,000 for a Lexus.
If you’re looking for a small SUV, the Ford Escape is a good choice, especially if your driving is primarily around town where it can get 30 miles per gallon. General Motors is entering the market with a variety of vehicles. Chevrolet and GMC have full-sized SUVs with a dual-mode hybrid transmission. Saturn has SUV and sedan hybrids, and the new Chevy Malibu is offering a hybrid.
Diesel
If you’re looking to save on fuel, “clean” diesel vehicles hold promise. These are nothing like the black-smoke-belching, sluggish diesels of the ’70s and ’80s. The new diesel engine runs with ultra-low sulfur diesel fuel (mandated in the United States since 2006), and is as clean as its gasoline counterpart.
Volkswagen has been selling these diesels for years, but there is a drawback, particularly if you’re a Bay State resident. These models can’t be sold in Massachusetts and four other clean-air states that hold even conventional gasoline vehicles to a higher emissions standard.
But that doesn’t mean it’s impossible to have a clean diesel vehicle. Mercedes Benz has developed one called Bluetec for its popular E-Class sedan that is awaiting final EPA approval. The design uses an additive called AdBlue to meet the tough California clean-air standards.
One of the most promising designs is from Honda. It will not need additives and may be sold in all 50 states late this year. Early testing reported it returning 50 miles per gallon.
EcoBoost
Ford is looking at fuel economy differently and is set to deploy the fuel-savings technology EcoBoost, which uses gasoline-turbocharged direct-injection. It results in up to 20 percent better fuel economy, 15 percent fewer carbon-dioxide emissions, and superior driving performance over larger displacement engines. The technology will be available in a half-million Ford, Lincoln and Mercury vehicles over the next five years – beginning with the Lincoln MKS sedan in 2009.
The Future
General Motors is developing the Volt, which may go on sale as early as 2009. This hybrid can run up to 40 miles on just electric power. When the battery needs recharging, it can be plugged in or operate on its three-cylinder flexible fuel engine. About half of all U.S. motorists drive about 30 miles per day. In theory, those using the Volt would never need visit a gas station.
Hydrogen has promise, too, with several manufacturers working on it. Some are using hydrogen as a fuel, just like gasoline. Others are using hydrogen and fuel-cell technology to produce electricity.
In the early 1900s, buyers had a choice of vehicles powered by steam, diesel, gasoline and electricity. The not-so-distant future may give motorists just as many choices — if not more.
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Windshields Key to Safety
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A vehicle’s windshield plays a critical role in automobile safety: Not only can driving with a damaged or cracked windshield hinder visibility, but also it can compromise the structural integrity of the vehicle during a roll-over.
Motorists with cracked or damaged windshields – a common occurrence in spring with gravel and other debris on the roadway – should have them repaired or replaced by a certified auto glass technician.
Proper auto-glass installation is key to safety; if a windshield is not installed properly, a deploying airbag could blow out the glass.
Still, good visibility is reason alone to ensure you repair any damage to and regularly maintain your windshield.
Visibility is a critical component of driving safely because it directly affects the driver’s ability to anticipate and respond to the driving environment.
Consider visibility when maintenance is performed on your vehicle. Items necessary for good visibility are:
• Clear, clean windows unobstructed by decals, dark window tinting or objects that interfere with the driver’s view of the road.
• Windshield wipers changed twice a year will ensure the rubber remains soft enough to efficiently remove water, snow and road grit from the glass surface.
• Headlights, brake lights, turn signals, parking lights, emergency flashers, and the center, high-mounted brake light should all be inspected regularly and replaced immediately if needed. Lights can also become dirty, which limits their brightness. They should be cleaned regularly.
• Mirrors must be clean, large enough and correctly angled to provide a complete view of all areas behind and to the side of the vehicle. Objects inside or outside the vehicle must not obstruct mirrors. They usually need to be reset when there is a change of drivers.
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To Maximize Your Car's Fuel Economy, Follow These Tips
By John Paul, AAA’s Car Doctor |
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| Carrying items such as an extra tire in your trunk adds weight to your vehicle, reducing fuel efficiency. |
If the rising costs at the pump have you taking a look at your budget, it may not be a bad idea to take a look at your driving habits to ensure you’re getting the most out of every gallon of gas.
Drive Smart
The old adage “drive like there is a raw egg between your foot and the gas and brake pedals” is still true.
Avoiding quick starts and stops will help you conserve fuel. When you use the brake, you are robbing the engine of momentum.
When you see an upcoming hill, speed up slightly to add momentum to the vehicle and use the brakes only to keep at or below the speed limit.
Shut off the car when idling for more than a couple minutes. Hybrid vehicles save gas by turning off the engine when stopped.
If you have a choice of sitting in the line at the drive-through or going inside, park the car and go inside (besides, the walk will do you good).
If you drive a pickup truck, keeping the tailgate down creates an air bubble, increasing drag and reducing fuel economy. Drive with the tailgate up to save gas.
Warm Up
You may need to warm up before exercising, but your car does not. Even during very cold weather, warming up your car for a minute or two is all that is necessary. Over the last few years, remote car starters have become popular gifts. They do warm up the car in cold weather, but at the expense of fuel economy.
Lose Weight
Lighter vehicles get better fuel economy. Look in the trunk for excess weight. Extra tires, sporting goods, tools, beach chairs and just plain junk add weight to the vehicle, reducing its fuel efficiency.
This includes driving with a full tank of gas when you are not expecting to go on a long trip.
If you have a rooftop carrier, only use it when you need it. On some vehicles, a rooftop carrier can reduce fuel economy by as much as 20 percent on the highway.
Don’t Speed
Most cars are the most economical when driven at speeds of 45 to 55 miles per hour.
Get a Check-up
Make sure your car is in the best possible condition. A dirty air filter, misfiring spark plugs, and faulty engine sensors can all drastically reduce fuel economy.
Don’t forget the tires. Low tire pressure and wheel alignment problems can reduce fuel economy.
Find a Friend
Short of walking and biking, there is not better way to save fuel than carpooling.
Go High-Tech
Switching to synthetic-based lubricants for the engine can help improve fuel efficiency.
Plan Ahead
Combine trips. In general, one longer trip is more economical than several short trips. Listen to traffic reports. If you are a two-car family, drive the most fuel-efficient vehicle. Save the big vehicle for trips to the home improvement center and carrying the soccer team.
Don’t Be Taken In
Historically, when gasoline prices start to climb, gas savings devices and additives start to make a comeback. Over the years, there have been all kinds of claims, from magnets that attach to the fuel line to supplements for the gasoline itself.
It has been my experience that none of these products have been able to stand up to their claims.
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Hydrogen Cars Likely in the Near Future
By John Paul, AAA’s Car Doctor
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I was driving a 2008 Honda Accord recently and idly playing with the navigation system.
Like most, the system had a category section, where you typically find locations of restaurants, ATMs and hotels.
One selection caught my attention: hydrogen-refueling stations. The nearest is in Latham, N.Y.
Most people think the chance of fueling their vehicle with hydrogen is as likely as Rosie the robotic maid from the Jetsons cooking their dinner. But if Honda took the time to list hydrogen, is it that far away?
Unlike hybrids and clean diesels, hydrogen has the promise of zero dependence on oil and no vehicle emissions other than water vapor. Hydrogen cars work by either burning the hydrogen gas in a fairly typical internal combustion engine or through a fuel cell that produces electricity to operate an electric motor.
Where are we with hydrogen? According to the Web site www.hydrogen.gov, we are headed in the right direction by way of the Hydrogen Fuel Initiative. The goal is to develop hydrogen production, delivery, storage, and fuel cell technologies that enable the automotive and energy companies to commercialize fuel cell vehicles and hydrogen fuel infrastructure. The program has a budget of $1.2 billion over its first five years.
Right now, we are producing the majority of hydrogen by using natural gas. This takes a lot of energy and is fairly expensive.
According to the Web site www.planetforlife.com, hydrogen can be produced by several methods. You will need an energy source and a hydrogen source. Today, the cheapest source of hydrogen is natural gas.
The problem is the resulting hydrogen has only 50 percent of the chemical energy of the original natural gas.
Hydrogen can be produced from oil, but the energy efficiency is a little worse. If hydrogen is derived from fossil fuel, then carbon dioxide – a greenhouse gas – is released in all cases.
The other problem is using dirty fuel to get clean fuel doesn’t make a lot of sense. Over time, hydrogen may be produced through the use of nuclear power plants, although it looks like those power plants won’t be coming on line until the year 2020.
The other problem is energy companies don’t want to invest billions in research and distribution if there is no demand. Vehicle manufacturers are not willing to invest billions in technology if there is no refueling infrastructure.
I have driven hydrogen vehicles and found them to be a pleasure. The fuel cell cars are quiet and smooth. The internal combustion design drives similarly to the car you drive today.
Almost every manufacturer is working on hydrogen in some form, and one of the most interesting prospects it the Ford HySeries Edge. This is a Ford Edge hybrid that uses a hydrogen fuel cell and lithium ion batteries. This gives the Edge a decent range, plus the added benefit of battery power when hydrogen is not available. According to Ford, this works out to about 65 cents per gallon.
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Dangers of Automatic Tire Pressure Monitoring Systems
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| Motorists should check tire pressure monthly, even if their cars have tire pressure monitoring systems. |
As 2008 model year vehicles hit the road, motorists will find they are equipped with tire pressure monitoring systems that illuminate an on-dash warning light when the pressure in one or more tires is low. However, AAA warns motorists that this system should not replace monthly tire pressure checks.
Federal law mandates that all 2008 and newer vehicles must be equipped with a tire pressure monitoring system. However, the systems are calibrated not to trigger the warning light until a tire is at least 25 percent under inflated – well below the pressure required for safe driving.
According to a recent survey by the Rubber Manufacturers Association, 40 percent of motorists said if their vehicle was equipped with a tire pressure monitoring system, they would either never check their tire pressures or would check them only if the dashboard warning light came on. More than two-thirds said they would be less concerned with routinely maintaining their tires if their vehicle had such as system.
Two types of tire pressure monitoring systems are used on new vehicles – direct and indirect sensing. Direct-sensing systems are the most accurate and use a sensor inside each tire to detect the pressure to within one pound per square inch. Most direct-sensing systems can read out the tire pressures on a dash display, eliminating the need for motorists to use a traditional gauge to check tire pressures. However, it’s important that motorists consult the tire information decal or owner’s manual of their vehicle to find out what the correct tire pressures should be. AAA recommends motorists whose cars have direct-sensing systems check the on-dash readout monthly for decreased pressure. Even with direct-sensing systems, the warning light will not illuminate until a tire is 25 percent or more under inflated.
Indirect-sensing systems do not monitor the actual pressure in each tire and are therefore less sensitive. They monitor the antilock brake system wheel speed sensors to identify when one tire is significantly under-inflated compared to the others. A tire with low pressure has a lower profile and therefore rotates faster than a properly inflated tire.
Because indirect-sensing systems monitor relative tire speed rather than absolute tire pressure, they will not detect low tire pressures at all if all four wheels deflate equally.
Maintaining proper tire pressures is key to safe and efficient vehicle operation. AAA research shows one in every three cars has a significantly under-inflated tire, and the National Highway Traffic Safety Administration reports 660 fatalities and 33,000 injuries occur every year as a result.
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You, Your Vehicle and U.S. Energy Policy
By Amy Myers Jaffe and Kenneth Medlock III
James A. Baker III Institute for Public Policy |
Editor’s note: Amid growing concerns about the security and availability of oil in an increasingly tense geopolitical environment, the U.S. is at an energy crossroads. As Congress labored to create an energy bill this past summer, it debated topics such as fuel-economy standards, alternative and sustainable fuels, and carbon emissions. There are many policy options, but no easy answers. AAA believes Americans must become educated and engaged in the energy debate. We are pleased to present the following informative article by Amy Myers Jaffe and Kenneth B. Medlock III. These internationally recognized experts lay out many of the facts on this complex topic, providing motorists information needed to understand the issues being debated.
We Americans love to drive our cars. All told, we own more than 242 million road vehicles — nearly one vehicle for every person in the country — and we travel 12,000 miles per vehicle each year. Virtually all of these vehicles are powered by petroleum-based fuel.
Driving is part of the American way of life. While we represent 5 percent of the world’s population, Americans use more than 33 percent of all oil consumed for road transportation. And as other countries adopt our lifestyle of freedom and mobility, the demand for oil is increasing. China, for example, has a population four times that of the U.S. and today uses only about 5 percent of the world’s transportation fuel. But with its booming economy, it is expected to increase its use exponentially in the coming decades.
This situation is causing many to ask: How will even more cars on the road contribute to already increasing problems? Oil is a finite resource, and although there are billions of barrels of oil left under the ground (in fact trillions if one counts more expensive, unconventional resources such as Canadian tar sands), geography and geopolitics may render future oil supply less reliable than in the past.
From 1970 to 2000, more than 40 percent of the increase in world energy supply came from within industrialized regions such as the U.S., Europe and Australia — more specifically, Alaska, the U.S. Gulf of Mexico, the U.K. and the Norwegian North Sea. However, over the next 25 years, experts project that more than 90 percent of new oil supplies will come from more unstable regions including the Middle East, West Africa and the former Soviet Union.
The International Energy Agency estimated that more than $2.2 trillion will need to be invested to meet the increase of 30 million to 40 million barrels of oil a day the world will need beyond today’s demand of 83 million barrels a day. Fifteen percent of that added demand is projected to come from the U.S. alone and another 24 percent from China.
It remains to be seen whether this massive investment will materialize to meet the world’s growing thirst for oil. During the past two decades, the U.S. oil policy has been to rely on our allies in the Persian Gulf such as Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Oman, as well as major exporters like Venezuela and Nigeria to provide the oil we need.
In 1990, when Iraq invaded Kuwait, cutting off 5 million barrels a day of needed oil supply, several of these Persian Gulf allies increased production to make up the difference, limiting the effect on world oil supply and thus the price.
But the internal stability of many oil-producing countries looks a lot shakier now than it did in the 1980s and into the 1990s. In fact, the list of oil-exporting countries whose production (despite ample reserves) has been stagnant or falling in recent years due to civil unrest, terrorism, inefficiency, government mismanagement or corruption is long and diverse. Do we really want to rely on unstable petrostates to make sure we can get to work in the morning?
This begs another question, “How can we reduce our dependence on imported oil?” President George W. Bush offered a plan to reduce gasoline by 20 percent by 2017, mainly through expanding biofuels programs.
Congress and Presidential candidates have proposed other solutions to our oil dilemma. Some officials advocate conservation; others want to see policies that will increase supplies through either new construction of refineries or promotion of alternative fuels. Still others say innovative automotive and fuel-system technologies can solve the problem. But the issues related to American gasoline supply, reliability and use are fairly complex and therefore proponents of easy answers are likely glossing over the truth about the details of such ideas.
Here are some of the basics we need to understand before thinking about the various proposed solutions:
Scope of the Issue:
The Size of the U.S. Gasoline Market
The U.S. road fuel market is the largest in the world. There is close to one vehicle on the road for every American. What does this mean in terms of fuel use? The U.S. road petroleum use represents 33 percent of all global road petroleum use, twice as high in percentage terms as all of Europe, which uses 17 percent of all global road petroleum.
Does the size of the U.S. gasoline market matter in terms of implementing policies to enhance American energy security? Yes, the U.S. market is so large it makes it extremely difficult to solve the challenges raised by growing reliance on imported oil.
The Facts About Mileage Standards
What are CAFE Mileage Standards? The Energy and Conservation Act of 1975 mandated that all new passenger cars should meet a standard of 27.5 miles to the gallon by the 1980s. Under recent new rules, new light trucks (including SUVs) are mandated to average 22.2 mpg for model year 2007.
Improvements in fuel efficiency that were realized from the late 1970s through 1990, catalyzed by mandates and consumer demands for lighter vehicles, have resulted in considerable fuel savings. In fact, current U.S. gasoline consumption would have been about 33 percent higher than it is now without those improvements, meaning efficiency has acted as a virtual source of supply.
How much oil could we save if we tightened CAFE standards? Improving current on-road vehicle efficiency by one additional mile per gallon per vehicle would save close to 600,000 barrels a day in American oil imports. Additional efficiency gains per gallon would save even more oil, but the savings diminish as better mileage performance tends to promote increases in driving distance.
Could these oil savings be realized quickly once the law is in place? No, given the used car market in the U.S., it takes on average about eight to 10 years before a motor vehicle is retired from use. Since CAFE standards apply to new cars, plan on almost a decade before all cars on the road will meet the higher standard.
Can we achieve U.S. energy independence through tighter CAFE standards? U.S. crude oil imports were over 12 million barrels a day last year. Since we consumed just under this amount in 2005 for road transportation, it would be impossible to raise car efficiency enough to eliminate oil imports through car mileage standards alone.
Even to cut U.S. gasoline use by a more modest goal, such as 20 percent, could require all new cars coming onto the road over the next 10 years to average up to 42 miles to the gallon.
The Facts About Energy Independence and Ethanol
U.S. ethanol production averaged 316,000 barrels a day last year, up 19 percent from 2005 levels. Can ethanol make us energy self-sufficient like Brazil? In point of fact, Brazil did not achieve energy independence through its ethanol program.
Brazil’s ethanol production has only risen from 232,000 barrels a day in 1990 to 313,000 barrels a day currently. Brazil engaged in an aggressive offshore oil exploration campaign that raised its domestic oil production from 650,000 barrels a day to 2 million barrels a day during the last 17 years.
For the U.S. to achieve oil independence by replacing gasoline with ethanol, we would need to produce more than 10 times the amount of biofuels being produced worldwide today.
A Role for Conservation
Can conservation make a contribution to reducing U.S. oil imports? President Bush mentioned a goal to reduce the increase in U.S. gasoline use by the year 2017. To hold U.S. gasoline use at 2005 levels by 2017 through conservation, each of us would have to drive 45 miles less per vehicle per week. For many Americans, that could be one day a week commuting in car pool or by public transportation or telecommuting. Based on statistics showing annual miles driven per vehicle each year, most Americans are probably not traveling more than 35 miles a day.
Could battery or plug-in hybrid electric cars help? Yes, virtually no oil is used in generating electricity in the U.S. Most electricity generated in the U.S. is done with domestically produced fuels other than oil, such as natural gas, coal, nuclear, hydroelectric and renewable energy.
Proposed Solutions
Of all the solutions that have been proposed in Congress or by U.S. Presidential candidates to promote U.S. energy independence, which is the best one? Sadly, the reality is that no single solution that has been proposed will lead to a decrease in U.S. gasoline consumption or achieve U.S. energy independence. Eliminating 12 million barrels a day of oil imports from our daily lives is not plausible.
What should we be looking for in a sound policy on reducing reliance on foreign oil and protecting the global climate? It is going to take a portfolio of policies including many different kinds of measures to reduce oil use and promote new technology. It may also require changes in lifestyle and perhaps, depending on circumstances in the future, personal sacrifices.
Therein lies our situation and the barometer through which proposed energy policies should be judged. The reality is, in order for us to decrease oil consumption, many of the proposed policies would have to be implemented all at the same time. Any single policy implemented by itself is unlikely to be able to do more than eliminate only a small part of our future increase.
To stay current on any changes to CAFE Mileage Standards go to www.nhtsa.gov.
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