By Brendan Moyle 04/10/2021


Introduction

I was going to drive to Wellington for a funeral that day. And when I got up, my car was gone. It was a Subaru Forester of 2006 vintage. The paintwork was near immaculate and everything ran smoothly. I’d maintained that car for years. Not just on a casual and erratic basis, but consistently. The kids liked locating it in mall carparks. They just walked to where the glow was. Losing it when I was supposed to be in bereavement felt especially cruel.

The Social Cost of Crime

The car was insured, but it is also easy to steal Subarus from this period. It is perhaps unsurprising that the Subaru Legacy and Impreza are in the top 10 of stolen makes. But despite the insurance, a lot of other costs occur. I contacted the Police first for a report, possibly being the first (or at least in the minority) who when asked what colour the car was, included the paint-code. I might be a bit obsessive.

Then it was on to the insurance. But I had no car and a funeral to get to. So after the main steps are done, I have to rent a car for a couple of days. So aside from the distress and anxiety, I’m out of pocket with that. Especially as the rental car isn’t quite as clean as what I’m used to (more anxiety). There’s also some personal stuff in the Subaru. A first aid kit. Some cleaning gear and detailing brushes. And alas, my carbon-fibre tripod.

And the time. This whole exercise eats up time. I’m looking online for replacement tripods. For possible replacement cars. Looking at information on car security.

The car is recovered 5 days later. The Police used road spikes to stop the vehicle. The thieves had not been using it to run errands for their sick grandmother. Overall, the damage to the Subaru means it is written off. This is unsurprising. It was 15 years old so I knew the book value was low. But now I do have to shop for a new car. Fortunately there is a convenient bus route that takes me to a cluster of dealers. This however, also takes time. A week I planned to go off and take photos and see my mother in the Hawkes Bay are postponed. Opportunities are lost while I look for a replacement.

And the insurance doesn’t really cover the cost of a replacement. The coverage is for a 15 year old Subaru. So I know I’m in the market for something newer. Plus it’s a chance to get something with better fuel economy and less emissions. This is not that challenging. The Subaru had an engine designed in the 1990s. Car engines are now much more efficient. One of the reasons transport emissions in NZ are relatively high is because the average age of the light-car fleet is around 14 years. The technology of that era does produce more emissions. But whatever I get, I have to spend a lot more money I never planned to.

Is it time to go electric?

Actually, one of the reasons I was hanging on to the Subaru was I was waiting to see how the NZ transport policy and the car market would play out over the next 5 years. Were there going to be more incentives to go electric? What if the battery technology improved in the next 5 years? Were prices going to fall?

It turns out, going electric doesn’t work for me, not now. And the reason isn’t because I tow a large boat every few weekends. It is because I bike. I’m too green for an electric car.  Weird huh? Most trips I take are on the bicycle. This drives down the kilometres I drive annually. I do about 5000-6000km a year in the car because the bicycle substitutes for a lot of daily trips. A large chunk of those km came from family trips to the Hawkes Bay or to take photos in the greater Auckland region. Sometimes even up in Northland. Since I got the car in July I’ve driven about 300km.

So relative to say, a newish, fuel-efficient ICE, the premium to go electric is around $30,000. Now, you can play around with those numbers, but when you are spending say $600 a year on petrol, the advantage of the electric car in terms of reduced energy costs, does not make sense. It’d take decades before that reduced energy-expenditure would cover that higher price. If I had $30,000 to spend on reducing my emissions, an electric car wouldn’t be very efficient.

What about no car?

I considered this. I’m with CityHop so can use their car-share system. Sometimes buses are quite good. I can bike a fair bit. But this does not really work and that’s because of Auckland. High housing costs (rents, house-prices) mean we don’t live close to all the amenities we use. We’re in the suburbs. The nearest CityHop pod for a rental car is many kilometers away. If I need to drop kid 1 anyway in the morning, getting up especially early to bike to the pod, pick up the car, go through extra peak-travel roads to pick him up, suddenly seems a lot more onerous.

The public transport system is patchy. Sometimes it’s good. Really good. It’s better than using a car. Often however it is poor. The buses travel infrequently, they don’t go anywhere near the destinations you want, and do not go at the times we need. And the cycle infrastructure is a long way off being good enough. All of this meshes with the housing issues and a car becomes the best personal choice. Not the best choice for everyone else but it is the best choice personally for many trips.

In short, Auckland is not well designed to live without a car, especially when you’re out in the suburbs and need to get people to different destinations at different times.

So what car?

The popularity of the SUV has always seemed a bit odd to me. I guess they can do a bit of everything and that helps the demand. But as a cyclist I’ve never been impressed by them on our city roads. They’re typically wider, crowding out precious road space next to me. Their fuel economy and road handling isn’t great. Which doesn’t appeal both on the environmental side, and also from the times when I have to drive in challenging conditions. Some of the State Highways I take are closed in winter time because of snow and bad weather. The roads have a lot of hills, bends and narrow sections. They are a bit dangerous, as the high road toll on them illustrates. Also, aesthetically speaking, SUVs all look roughly the same. The design has to solve several safety and efficiency challenges, whilst still being high off the ground, and there’s pretty much only one basic shape that suits. Projecting front, a bit of extra width to the body, a long sloping roof. The look has become boring.

So I went look for a hatchback. These have better road handling and tend to have better fuel economy. They’re easy to use in urban areas. Parking is much simpler.  But they’re also getting tricky to find. The choice set is shrinking. Not as much as sedans, but the numbers and models are noticeably lower than the SUV market.

In the end I found a 2018 VW Polo GTI that worked out. It has a 5 1/2 star fuel efficiency rating. Similarly its Carbon emissions are relatively low, which tend to depress a bit further by using E10 biofuel. It is also wickedly fun to drive. I shouldn’t say that as an avid cyclist, but with a 2l turbo engine, a low centre of gravity and relatively light weight, it is fun. The road handling is exceptionally good.

So overall, the hatchback still has a lot going for it. You get decent storage space by being able to fold down the back seats. You get better fuel economy and handling, which lowers running costs. It is easier to use in cities.

The fuel economy is also an important consideration. Two things are inevitably going to make filling up a car with petrol more expensive. The first, is that Government climate policies, like the Emissions Trading Scheme, are going to put upward pressure on petrol prices. There’s not much chance they’re going to go down. And second, the period of low global oil prices is going to come to an end.

Since about 2014 Saudi Arabia has been producing a lot more oil than usual, and as the biggest, by far, player in OPEC, this has put downward pressure on oil prices. The US with its fracking policies has also expanded its output. You can see that effect in the graph below, where oil prices start dropping away.

Crude Oil Prices

Just note that these aren’t adjusted for inflation. So $US50.00 in 2020 would be about $US30.00 in 1995. The 1990s was a period of rather low global oil prices. The say $US30.00 a barrel in 1980 would be equivalent to $US94.00 in 2020.  This situation is not sustainable. As the global economy expands more demand will push up prices on oil, and large oil producers like Saudi Arabia are likely to return to lower outputs to raise their revenue.

Conclusion

Other than having your car stolen is a stressful event that costs more money and time than the insurance covers, it also brought home the challenge of going car-less. The decision to purchase a car is also influenced by the public transport system, cycling infrastructure, and house and rental prices.  It’s hard to see say, Te Tāruke-ā-Tāwhiri, Auckland’s climate plan, meeting its goals if these aren’t addressed.

I’m also going to go out on a limb here, and say if anyone is buying an ICE vehicle and expecting petrol prices to stay at their current low levels, you’re going to be in for a surprise. Even if you can’t afford an EV, putting a low priority on fuel economy could end up being  more expensive than you think. And finally, while the SUV has gained a lot in popularity, the hatchback still offers a lot of real advantages to the urban motorist.