ericpetersautos.com / By Eric Peters / January 7, 2013
Many new cars are optimized for ethanol – “flex-fuel” compatible is how it’s usually described. The problem, of course, is that a majority of cars in service are not optimized for ethanol; many are not even compatible with it.
One effect – intended or not – of the ever-increasing concentration of ethanol in “gas” is to accelerate the retirement of older cars. This can be considered from a number of points of view. First, there’s the economic interests of the car companies; they need to sell new cars at a certain rate in order to remain profitable. The problem (for them) is that for more than 20 years now, the useful life of a new car has been increasing to the point that it’s common to find cars more than 10 or 12 years old in service as daily-drivers. In fact, the average car on the road is now more than eight years old. Rather than buy a new car every six years or so – which was typical in the ’70s – people now routinely hang onto their cars for twice as long. That means – if you factor it out over a lifetime – that the average person buys just two or three new cars vs. four or five.
Even worse – from the standpoint of the car companies – is that a large and growing number of people aren’t buying new cars at all. Because lightly used late-model cars with three or four years (and 30,000 or 40,000 miles) on them still typically have more useful life left in them than a brand-new car had back in the 1970s. By purchasing a used car, one saves a tremendous amount in “up front” costs – and suffers very little in the way of “down-the-road” costs. Or at least, not enough to obviate the huge up-front savings. This has become fairly common knowledge. As a result , new car buying has become less common – and less frequent. From a purely business point-of-view, this is not good news for the car industry, especially in a saturated/mature market without the potential for exponential growth that existed forty or fifty years ago.
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