Saturday, January 24, 2009

Gassing Up

I have a prediction: gasoline will hit $3.00 per gallon by July 4th. Why do I say this? Adjusted for inflation, gas prices are lower now than they were when I was in college…and that was a long time ago. The major oil producing countries are finally lowering production. The federal and state government are proposing raising gas taxes to pay for road repairs and construction. Massachusetts has a proposal to up the gas tax by 29 cents per gallon. Drivers are becoming less interested in conserving gas. In my opinion, this means that gas prices will rise.

Couple that with the current inability of the automobile industry to sell cars. The spike in gas prices killed off the market for monster cars. Then the drop in gas prices lessened interest in small cars. Toyota is even having trouble selling the Prius. This presents a glorious opportunity. Prepare for the increase in gas prices by buying a fuel-efficient car now at what are probably bargain basement prices. Once the price of gas goes up, the price of these small cars will rise too. Think of the savings when the price of gas goes over $4 or $5 per gallon permanently.

What does this have to do with taxes? Nothing. But preparing for it now will improve your own personal finances in the future.

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