The guy manning the crow’s nest the night Titanic ran into the iceberg didn’t see it in time – apparently because the binoculars had been mislaid prior to departure. The guy was relying on his eyes to spot the iceberg, which he saw – but too late for the ponderous liner to turn away. The rest, as they say, is history.
Is history about to repeat?
The “iceberg” this time is $5 or higher gas – and the “Titanic” is the good ship GM (as well as Ford and Stellantis). All three are buoyant – financially – chiefly because of the profits generated selling trucks and SUVs. They are the cash cows. The profit margin on cars is tiny; on crossovers it is marginal. On EVs, it is nonexistent. It is the thousands – even tens of thousands – in profit generated on each sale of trucks and SUVs that keep GM, Ford and Stellantis (via Ram) afloat.
$5 – or higher – gas is likely to sink that.
People can finagle the cost of buying a truck or SUV because the payments can be stretched out over six or seven years at a (relatively) low interest rate. But gas you have to pay for right away, in full – or put it on the card and either pay it in full at the end of the month or pay the kind of interest that was once illegal to charge, since it was considered usury. It is now perfectly legal to charge people as much as 30 percent interest – compounded monthly! – on their credit card purchases. 
Most full-size pick-ups and SUVs take about 22-25 gallons to fill up. That’s more than $100 to fill up – at $5 per gallon. If the owner has to fill up once a week, it’ll be $400 per month – just for the gas. That used to be what it cost to buy a truck – not just the gas.
We enter surreal times.
It is difficult – for those who can remember when a full-size pick-up could be bought for less than $20k (this was as recently as the ’90s, for those who do not remember) to get their heads around the $70k commonly paid for a full-size pick-up today. Probably because most people just barely earn that much in a year. The purchase of a new truck has thus become something analogous to what the purchase of a Cadillac was back in the ’70s; i.e., it was something few people did because only a few people could afford a Cadillac. 
How is it that a truck – or an SUV – became a luxury item?
Well, they have. But it’s worth remembering that, back in the day, even people who could afford to buy a new Cadillac found they could no longer afford to fuel their Cadillacs once the cost of fuel doubled. The great land yachts sat unsold on dealer’s lots.
Eventually, they disappeared altogether.
This time, GM and Ford and Stellantis may disappear altogether – because unlike back-in-the-day, they haven’t got anything else to fall back on. They do not have practical, affordable vehicles in their inventory. Just fleets of overpriced crossovers and ridiculous, money-pit EVs. It has been the trucks and SUVs that have carried them all. Enormous, gilded and gaudy things that are the Sedan deVilles and Eldorados of our times.
Times that are a’ changin’
. . .
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[…] https://www.ericpetersautos.com/2026/04/13/the-iceberg-ahead-for-gm-and-ford-and-stellantis/ […]
Pretty much every new car requires premium too which can be .50/gallon more at least here in Colofornia
Coliformia?
Joe & Susie haven’t been swinging the payments for anything for years, except maybe the mortgage, if they’re lucky enough to have one.
Now it’s just juggling credit card payments, for gas, food, and even bills like power, water and heat.
How indebted is the average household today? A whole lot more than in past generations….
And all by (((their design)))….
You know what?
It’s time to Old Yeller this thing. It sucks but it’s also the humane thing to do. The taxpayers made sure they had a good life, they did the best they could and then some, and now it’s time to visit the neverending dragstrip upstate.
I’m practically rubbing my shekel grubbing mitts together in anticipation for the bargain prices coming up for the gas guzzlers that are unaffordable today, but will be offered at giveaway prices soon…I watched this exact same movie in the 70’s and was too young and poor to take advantage of it then, but I can now!!!
Gas will drop in price again….it always does….
Oy Vey!!!
YMMV….
About a year ago, I was on a semi quest to find a cheaper gas saver for me. My idea was that fuel wasn’t going to stay cheap in the Trump era. I had no idea that the faggot would try something stupid like this war. In my area, Houston, the used car market carries a $3-5k premium over the rest of the rest of the country. They are still asking $10k for some clapped out piece of shit that used to be worth 3-4k. My work schedule precluded me finding anything realistic anywhere else.
It turns out my gut instict was right. The price for 20 year old gas savers has pushed steadily upward since.
It sucks having the knowledge but not really the means to act.
I just spent $24 to fill a sportbike with fuel over $6.30 per gallon here north of Chicago. Its getting cheaper to operate the flex fuel jeep with ethanol at $2.60/g
Wow, I didn’t know E85 was that cheap up there. Maybe time to start looking at flex fuel vehicles. Eric?
Wish I had picked up an Equinox EV pre ‘excursion’ at 0% financing (still offered)
What was then $27k, nicely-equipped, is now back up to $35k.
Meh. It’ll be temporary, just like the last time. I love how every time gas goes up for a while, everyone’s dumping their ‘gas guzzlers’ and going into more debt to buy some little gas sipper that’ll get 10MPG better mileage. Spending tens of thousands to save them maybe a thousand dollars a year in gas.
I’ll keep driving my 12MPG truck. Maybe pick up a few real bargains to hold till the gas prices go down again, and then sell for double what I paid. The price of rural acreage will likely take a big drop, like last time, when the MSM [Morons, Simps, and Metrosexuals] assured us, the day after gas hit $4.25/gal that everyone was abandoning the country for the cities- so there may be some bargains out there for a while.
For those who are already stuck in the city/suburbs with no land or freedom, and tethered the 9-5, you may have no choice but to suffer whatever they throw your way; but in the real world, there are always options, and when something bad happens in one sphere…it usually means that there will be something good in another sphere if you are able to take advantage of it. Being poised to take advantage of that differential is where it’s at, which is probably why they goad the young into being captives and specialists and debt slaves with no options, so that they will forever be dependent on the system and thus never rebel against it nor advocate/cheer it’s destruction…just as the literal slave didn’t want to see the destruction of the plantation, because he had no others means of even the most meager support and sustenance afforded him by his servitude to the plantation.
Contrarians are still humans. It’s the easier path to bitch and compain, blame someone else for your situation in life, than to do something about it.
I wish life were so simple that I could just stack my gold coins selling stuff from a honest day working a homestead. But that’s not the hand I’m dealt. So I tried to learn how to play the market and live semi-rurally where the “farm” is a small gig, really nothing more than a big hobby garden. As long as we keep the grocery bill down and can sell $50 worth of eggs every week we measure it a budget success. Same with hunting (sometimes successful, sometimes not) and splitting sides of beef with neighbors. It may not be as cheap but still has real value in quality and local supply resilence. I adhere to hunting seasons but if things got dire I wouldn’t be nearly as concerned with the calendar and DWR rules to fill the chests.
I’ll never be as successful investor as congressmen, Warren Buffet or Larry Fink. It’s not because they’re smarter, though. It’s because they get insider information. In fact I’d wager the highly successful people in fact sit way on the left tail of the intelligence curve. They’re as big a toadies as anyone, their success being completely tied to their willingness to play Epstein games. But I’m also not stupid enough to bet against them and try to be a full time farmer. That’s Russian roulette with the people who loaded the cylinder.
Smart man. We’ve done the same thing many times re: buy 12-14mpg trucks for a song.
I’ve given up trying the explain the math to people.
The lower case car company has an ace in it pocket. Defense (or should I say War) contracts. They have other things cookin too that are incrementally shifting biz away from the consumer sales
That worked out great for Colt…
The “iceberg” is $8 regular in MS or AZ
Game over.
Once again, Eric scoops the New York Slimes, which today features an editorial by Brookings Institution eclownomist Clifford Winston titled The Death of the Basic American Car. Excerpt:
‘In the postwar era, the middle class was growing fast, and Detroit offered a bevy of stripped down sedans with simple, easy-to-fix mechanics, designed for the average American family. If you’re old enough (or watch MeTV), you may remember the Ford Falcon parked on the streets of Mayberry, the fictional town in “The Andy Griffith Show.” Introduced in 1960, it cost $1,900.’
https://archive.ph/ZPOIC#selection-445.2-449.1
Oddly, Mr. Winston has nothing to say about CAFE and saaaaafety regulations, choosing to focus instead on protectionist measures going back to LBJ’s ‘chicken tax’ on light trucks (which endures today). That’s why Eric’s essays on the subject are better and more comprehensive.
But the Lügenpresse would rather stick with conventionally credentialed, think tank sources who despite having only a shallow grip on the subject, can be relied upon not to veer into Wrongthink — the sine qua non of wriggling through the all-important Overton window of acceptable mainstream discourse.
None of these libertarian fags bothers to point out what regulations have done to cars. They focus on the maaaarkets which is fine until you realize that politics is part of the principles of marketing Product, price, place, promotion and the political economy. Chicken taxes aren’t a big part of the equation. Chicken taxes are added to costs to build the product, not the retail price.
Government regulations and automakers slavish anticipatory push on safety crap adds $10k to the cost of a new car. Minimum
I agree, Swamp –
It is just absurd to say that $15k new cars are not feasible – provably absurd, because such cars are available outside the United States. Air bags alone have added probably $5k to the price of a typical new vehicle. Not the bags themselves but the having to design the car around the bags. The dash and door panels and everything else. It’s a system, not just the bags. “Emissions” are another big cost-adder. The meaningfully harmful combustion byproducts were effectively and inexpensively death with via EFI and cats with 02 sensors. Since then it has been chasing fractional further reductions at ever-increasing cost. A good example being direct injection. A hugely elaborate system that adds cost for no appreciable gain. A ’90s-era TBI engine starts just as quickly and doesn’t rattle like it has bad lifters; the emissions differences are trivial. The cost isn’t.
You may never be as financially “successful ” as all our CONgress Criminals, or (((Larry fink, Warren buffet))), but you should be comfortable knowing you aren’t a psychotic sociopathic criminal, like those critters.
“Judgment Day and God is calling,
underneath the War Pigs crawling,
Death and hatred for mankind, poisoningtheir brainwashed minds…”
USSA.GOV will backstop the big 2.5, just as they have been doing so since ’79, when it became the lender of last resort for Chrysler.
Surely Farley and Barra know that.
Whether its full on bailouts for Government Motors, or whisper quiet Dept of Energy loans for FoMoCo, it’s all the same.
What will really suck are the overpriced 2030’s variants of the Trabant that will follow.
I think people will deal with $4-5 gas. The breaking point will be $6 and over.
Back in 2008, when the “shtock maa-ket” collapsed and gas hit $4.25 for the first time, they were giving trucks away and Piruses were flying out of the showrooms, I scored a stripped F-150 with a stick for $13,000 and change OTD including tax and delivery. It was only an $18,000 truck at full MSRP, though, but they put about $6k worth of incentives and rebates on it to get rid of it.
Still have it. I’ll never part with it.
If we plug $4.25 in 2008 into the CPI inflation calculator, it tells us that’s $6.52 today. So I would guess that’s where the shit starts to really hit the fan.
Of course the vehicle prices have far outstripped inflation and people are paying out the ass for that. If we plug in an $18,000 truck in 2008 dollars, it would be — get this — $27,600 in 2026, LOL. Try finding a showroom-new half-ton full-size truck for that today.
I think you’re right X. It’s the differential that matters. At $3.00, 15K/yr, 20mpg = $2,250/yr.
At $4.00 = $3000. At $5.00 = $3750. Most (but not all) can absorb that.
Eric’s been writing about how young people can’t even afford cars. I believe you are so out of touch you are out of your mind. This came out first week of March.
https://www.instagram.com/reel/DVo84i-DPZE/
‘Trucks and SUVs … the Sedan de Villes and Eldorados of our times.’ — eric
How could you forget the swanky Electra 225, Eric? But your point stands.
It all happened before in the first Oil Shock. In 1973, the US vehicle fleet achieved an average 11.9 mpg. At the heavier end, a Chevrolet Impala delivered 10.1 mpg, while a Cadillac Eldorado offered 8.1 mpg.
Nobody cared, because gasoline cost 36 cents a gallon. The only real inconvenience was having to stop frequently for refills, since the average vehicle range was 170 miles.
When OPEC quadrupled the price of oil, suddenly economical vehicles looked attractive. But most of them were built by Japanese and European makers, to suit their domestic markets which already had high-priced (because highly taxed) fuel.
Now the Big Three have complacently blundered into the same old jam, with the help (naturlich) of the US fedgov, which relaxes its strict CAFE standards for large footprint vehicles, such as giant trucks.
Joe Sixpack was barely swinging the truck payments. Now, crank his fuel bill to $500 or $600 a month, and suddenly Joe is treading water, gasping for air. It sent the US (and global) economy plunging into deep recession in 1974. Reckon it all might happen again?
Reckon Trump might resign like Nixon did, flashing V-signs as he boards the helicopter to exile himself in south Florida, never to return to Tel-Aviv-on-the-Potomac?
In the days of my youth, I was told what it means to be a man
Now I’ve reached that age, I’ve tried to do all those things the best I can
No matter how I try, I find my way into the same old jam
Good times, bad times, you know I’ve had my share
When my woman left home for a brown-eyed man
But I still don’t seem to care
— Led Zeppelin, Good Times Bad Times (1969)