MONEY Gas

Surprise: Gas Costs Less Than it Did a Decade Ago

The price of regular gasoline dropped to $2.659 per gallon at the Hi Tech Fuels station on Brainerd Road and other stations in Chattanooga, Tenn., on Tuesday, Oct. 21, 2014.
The price of regular gasoline dropped to $2.659 per gallon in Chattanooga, Tenn., on Tuesday, Oct. 21, 2014. John Rawlston—AP

But you may still feel like you're paying more. Here's why.

Gas prices have been plunging lately. For consumers, that’s great! It’s more money in your pocket.

Gas now averages $3.07 a gallon nationwide, down from $3.60 in June and $3.30 a year ago. That’s billions of dollars of savings for U.S. households.

But gasoline is one of the few products whose prices we vividly remember. Behavioral economist Daniel Ariely once explained:

For the several minutes that I stand at the pump, all I do is stare at the growing total on the meter — there is nothing else to do. I have time to remember how much it cost a year ago, two years ago, and even six years ago.

Gas may be cheaper today than it was a year or two ago, but I’ve heard several people recently say, “Sure, but I remember when it was $1.50 a gallon!” That nostalgia makes us think we’re still paying a fortune at the pump.

But several other things have changed lately that affect the real price of gasoline:

  • The average car has a much better fuel economy today than it used to.
  • The average American is driving less than they used to.
  • Average nominal wages are higher today than they used to be.

You have to adjust for all three improvements to show the true price of gas, and the real impact it has on our wallets.

When you do, the real price of gas is lower today than it was a decade ago, and about the same as it was in the early 1990s:

Source: Department of Transportation, Energy Information Agency, Bureau of Labor Statistics. The formula used to calculate this graph is: (average gas prices/average hourly wages of nonsupervisory workers) * (annual miles driven per capita/average MPG of passenger cars).

One of the most important forces in economics is that people adapt. And that’s what you’re seeing here.

Gas prices surged in the early 2000s, so auto companies started building more fuel-efficient cars, which consumers demanded (as did new regulations).

Fuel-efficient cars used to be dinky little toys that you’d be embarrassed to drive. That’s changing. GM GENERAL MOTORS CO. GM -1.2137% CEO Mary Barra commented last month: “The customer has that expectation. It’s not an ‘or’, it’s an ‘and.’ They’re expecting to have winning vehicles, but also to have the fuel efficiency. It becomes a business priority.”

Consider: A 1999 Chevy Suburban got 18 miles per gallon and had 290 horsepower. A 2015 Suburban gets 23 miles per gallon with 355 horsepower.

High gas prices also likely played a role in pushing families from the suburbs into the cities, where commutes are shorter. As Reuters reports: “In 2010, a total of 80.7 percent of Americans lived in urban areas, up from 79 percent in 2000. Conversely, 19.3 percent of the U.S. population lived in rural areas in 2010, down from 21 percent in 2000.”

I’m not a fan of forecasts, because they’re pretty much all wrong. But here goes: Over the next 20 years we’ll see moderately higher gas prices combined with much better fuel economy. Taken together, this chart — with all its adjustments — won’t look too much different two decades from now than it does today.

“Intelligence is the ability to adapt to change,” Stephen Hawking said. And we are.

For more on this topic:

Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends General Motors, and has a disclosure policy.

MONEY Autos

How to Tell If You’re Safe From Auto Recalls

An airbag igniter is built into a steering wheel for a car at the Takata Ignition Systems Gmbh factory in Schoenebeck, Germany, 17 April 2014.
An airbag igniter being installed at a Takata factory in Schoenebeck, Germany Jens Wolf—picture-alliance/dpa/AP Images

It seems like every other day, news breaks about a recall on millions of cars that, if left unaddressed, could prove deadly. Here's what consumers can do to ensure their safety.

There are two months left in the year, but 2014 has already broken the record for most auto recalls ever. As of October, automakers had issued recalls for an estimated all-time-high of 56 million vehicles in the U.S. “To put that in perspective, automakers have now recalled more than three times the number of new cars and trucks Americans will buy this year,” the Detroit Free Press noted.

The flurry of recalls has come fast and furiously in 2014. This week, Toyota issued a recall on roughly 250,000 vehicles in the U.S. related to faulty airbags, on top of a global recall of 1.7 million Toyotas for a wide range of safety defects that circulated last week. The National Highway Traffic Safety Administration (NHTSA) lists 29 separate auto manufacturer recalls thus far in the month of October, and the agency released a special consumer advisory this week, alerting the owners of 7.8 million vehicles that they should take “immediate action” to replace dangerously defective airbags.

And that’s just the tip of the iceberg. General Motors recalled 2.7 million vehicles last May, less than one month after the automaker announced it had spent $1.3 billion to recall 7 million vehicles worldwide, including 2.6 million for faulty ignition switches linked to 13 deaths. Ford recalled 700,000 vehicles last spring because of concerns the airbags wouldn’t deploy quickly enough, while some 16 million vehicles from 10 automakers have been recalled because the airbags, made by the Japanese company Takata, could inflate with explosive force strong enough to hurt or even kill the riders the devices are designed to save in the case of an accident. And on and on.

The numbers are so big, and the recalls pop up with such frequency, that you might be inclined to tune them out—not unlike the hacks and data breaches that occur with astonishing regularity at major retailers. But then, you know … there’s death and catastrophic injury. The potential of anything so dire affecting you and your loved ones should make you snap to attention and take action. Here are steps to take to stay safe:

For a Car You Own
When a car is subject to a safety recall, the automaker is required to notify vehicle owners via mail. The letter will feature the NHTSA (National Highway Traffic Safety Administration) emblem and include the words “SAFETY RECALL NOTICE” in large typeset. Hopefully that’s enough to alert recipients that this isn’t junk mail. The notification will include instructions, typically consisting of the need to bring the vehicle into a local dealership and have the recalled issue fixed. The service should be provided free of charge to the owner.

You might assume that service departments would drag their feet on handling such recalls—customers aren’t paying money out of pocket after all—but a Reuters story from this past summer pointed out that the recalls represent opportunity for car dealerships. Recalls bring in new customers, or bring back customers that haven’t been at the dealership since they bought the car, and when they bring the recalled vehicle in to be serviced, they may be inclined to get the oil changed or have some other work done. Heck, many have been known to browse showrooms while waiting for their old cars to be fixed, where they wind up getting talked into buying new cars. The takeaway for consumers is: Don’t allow yourself to be upsold into a costly service job when you’re at the dealership getting a recall issue addressed, and don’t buy a new car unless it’s truly the model you want, at the price you want.

To make sure that your car is safe, the NHTSA offers a Vehicle Identification Number (VIN) search feature online. Enter your VIN—which is displayed on the dashboard of the driver’s side is most easily seen looking through the windshield from outside—and you can find out if your car has been recalled anytime over the past 15 years, as well as whether or not the recall has been repaired on your specific vehicle. Unfortunately, the government site can be glitchy (the VIN search function has been listed as “temporarily unavailable” lately). If it’s not working—or even if it is and you want to be doubly careful—head to Carfax.com, which also allows people to look up recall issues for specific cars using VINs at no charge. For yet another option, the NHTSA allows you to sign up for email alerts for recalls on up to five vehicles, as well as alerts regarding any recalls of car seats and tires.

For a Car You Might Buy
Before buying a used car, do some due diligence on recalls. Carfax estimates that 3.5 million used cars were listed for sale last year with unfixed safety recalls. Get the VIN of the specific used car you’re interested in, and follow the steps above to make sure that any recall has been addressed. If it hasn’t, make the owner fix it before you buy—or use the fact that the repair hasn’t been made as a reason to cut the asking price. If you wind up closing the deal, don’t forget to bring the car into a local dealership to get the recall fixed asap.

For a Car You Might Rent
A bill currently under consideration in Congress called the Raechel and Jacqueline Houck Safe Rental Car Act of 2013 would allow agencies to rent cars that have been subject to recalls only if the defects have been fixed. In other words, as of now, it’s vaguely legal for the Hertzes and Enterprises of the world to rent recalled cars even if the recall hasn’t been addressed. In fact, in recent years, some major agencies have tried to make the case that it’s OK to continue to rent recalled vehicles to customers because some recalls are unimportant, as they don’t qualify as serious safety risks.

USA Today columnist Bill McGee investigated the murky world of recalls and rental cars this past summer. What he found is that agencies generally proactively remove vehicles from their fleets or have them fixed pronto if they’ve been subject to dangerous, high-profile recalls—failure to do so could expose them to millions in lawsuits if an accident occurred due to an unfixed recall. Hertz and Avis, among others, have said that coping with recalls has cost their companies millions of dollars this year, because when recalled vehicles are being fixed at dealerships they obviously can’t be rented out to customers.

But again, until the Safe Rental Car Act—named for two sisters who died in 2004 in a rental car with power steering fluid recall that hadn’t been fixed—is passed into law (hardly a done deal), agencies aren’t obligated to have all car recalls addressed before renting them out. “Currently, there is no prohibition on rental car companies renting vehicles that are under a recall, but have not yet been remedied,” a former NHTSA administrator named David Strickland testified to Congress last year.

What can a renter do to stay safe? Start by clarifying your agency’s policy. Alamo, for instance, states plainly, “We do not rent recalled vehicles until the recall has been remedied.” But information regarding recalls can be vague or hard to find with some other rental operators. If the policy is remotely unclear, call and ask questions.

You can also use the NHTSA’s database to see if the vehicle model you have reserved has been recalled, but this strategy comes with complications. For one thing, rental agencies generally don’t guarantee a specific model with a reservation—you reserve a “mid-size” category of vehicle, not a Toyota Camry or whatever. What’s more, it’s impossible to know a car’s specific VIN until you pick the vehicle up, and therefore it’s impossible to check if the model’s recall problems have been fixed. In light of these problems, you might want to make another call—to your local representative in Congress, to urge support of the Safe Rental Car Act.

Read next: Toyota Announces a U.S. Recall Over Faulty Passenger-Side Airbags

MONEY Autos

The Price of Hybrid and Electric Cars Is Plummeting. Here’s Why

2012 Toyota Prius
Toyota Prius David Dewhurst

Among the trickle-down effects of cheaper gas prices are lower sales totals for alternative-fuel cars—which in turn have forced automakers to slash prices on these vehicles.

USA Today just reported that Ford is cutting the sticker price of the fully battery-powered plug-in Focus Electric by a flat $6,000. That’s on top of a $4,000 price reduction on the same vehicle a year ago. The new sticker price is $29,995 including shipping—but not including federal tax credits of up to $7,500 and state incentives that might effectively knock another $2,500 off the amount buyers pay.

Obviously, Ford wouldn’t be instituting such dramatic price cuts if the Focus Electric was selling well, and part of the reason sales have been poor is that the model doesn’t stand out in an increasingly crowded field of midlevel-priced plug-ins where the Nissan Leaf, the pioneer in the category, remains the indisputable leader. Another reason for underwhelming sales of the Focus Electric—and for many alternative-fuel cars in general, for that matter—is simply that gas prices have been getting cheaper and cheaper.

According to the AAA Fuel Gauge Report, the national average for a gallon of regular was just under $3.10 on Tuesday, compared with $3.35 a year ago and around $3.70 this past spring. Gas prices for the year as a whole are down slightly compared with 2013, and projections call for continued lower prices in 2015. All of which hurts automakers’ efforts to convince buyers that it’s a savvy move to pay a premium over a standard gas-powered vehicle for a hybrid or electric car right now, with the anticipation that they’d more than make up the difference later on in the form of savings on gas.

To help sales, automakers have been trying mightily to make the difference in price between alternative-fuel cars and their traditional car counterparts disappear. Nissan slashed the price of the Leaf in early 2013, effectively bringing the takeaway price of the vehicle under the $20,000 mark. Leaf sales have been strong throughout 2014, up 23% year over year thus far. Ford Focus Electric sales are up in the U.S. as well, with September units sold up 60% compared with the same month last year. Even so, we’re talking about extremely small numbers: 176 Focus Electrics sold last month, versus only 110 for September 2013.

What’s especially noteworthy is that the combination of lower gas prices and increasingly fuel-efficient internal-combustion engine cars appears to be putting the squeeze in particular on hybrid cars like the Toyota Prius. According to Toyota data, 14,277 Priuses were sold in the U.S. last month, compared with 15,890 for September 2013. For the year thus far, Prius sales are down 11.4% compared with the same period a year ago—and mind you, this slump took place a time when Toyota sales overall are up 5.7%. By far the worst-performing Prius has been the plug-in PHV; only 353 sold in September, a decline of 71% versus the same month a year ago (1,152). As for hybrid sales overall, a total of 31,385 units sold in the U.S. in September 2014, a decrease of 35% from the previous month, and a decline of 6.5% from the same month in 2013.

Bear in mind that the hybrid sales slump has occurred while automakers have gotten more aggressive with discounts. As Automotive News lately noted about the struggles of alternative-fuel cars:

Data from KBB.com show that Toyota boosted Prius incentives to $2,300 per vehicle in September from $1,400 a year ago while Ford ramped up C-Max spiffs to $4,900 from $2,650 per vehicle in the same period; neither move helped sales.

So cheaper gas prices benefit drivers not only in terms of the obvious—cheaper gas prices—but also because they’re forcing automakers to slash prices on hybrids and electric cars that boast savings on gas as a primary sales pitch.

TIME Innovation

Let’s Fix It: Let’s End Human Driving

Sam Shank, chief executive officer and co-founder of HotelTonight Inc., speaks during a Bloomberg West Television interview in San Francisco, California on Jan. 2, 2014.
Sam Shank, chief executive officer and co-founder of HotelTonight Inc., speaks during a Bloomberg West Television interview in San Francisco, California on Jan. 2, 2014. Bloomberg—Getty Images

Sam Shank is the CEO and Co-Founder of HotelTonight

Roughly 10 years from now we will see the End of Human Driving — a seminal moment of the first half of the 21st century. I’m guessing my young sons will not need to learn how to drive

This Influencer post originally appeared on LinkedIn. Sam Shank shares his thoughts as part of LinkedIn’s Influencer series, “Let’s Fix It” in which the brightest minds in business blog on LinkedIn about how they would fix what’s broken in this world. LinkedIn Editor Amy Chen provides an overview of the 60+ Influencers that tackled this subject as part of the package. Follow Sam Shank and insights from other top minds in business on LinkedIn.

I’ve long been fascinated by the idea of technology replacing human drivers.

Let’s be honest: people aren’t always great drivers. They get distracted, tired and make mistakes. Technology can simply do a better job. This is a subject I’ve thought about deeply for the past 20 years. I believe it will have as much impact on the world as the switch from horse transport to automobiles.

The consensus opinion is that safe and reliable driverless cars will be available within a few years. Tesla just announced “Autopilot,” which will be available soon via a software update, and will allow for autonomous driving on freeways – an amazing first step.

Here’s what I think will happen next: the initial use of drive-anywhere autonomous cars (I call them AutoCars) will be with companies like Uber or Lyft rather than individually owned. They will rapidly gain acceptance because they’ll save people time (imagine all you could do with that time currently spent behind the wheel), will lower the costs of getting from one place to another, and will be way faster while also being safer than human driving.

Soon thereafter, as adoption skyrockets, cities will designate areas that are AutoCar-only. Lanes of highways will become AutoCar-exclusive, allowing for more density of driving and far higher speeds. Roughly 10 years from now we will see the End of Human Driving – a seminal moment of the first half of the 21st century. I’m guessing my young sons will not need to learn how to drive — but I’ll probably teach them anyway, as recreational driving is fun and won’t ever go away, any more than automobiles put an end to recreational horse riding.

The benefits of AutoCars are so pronounced across many areas – health, saved time, mobility of kids and seniors, lower road costs, efficiency – all of which I’d love to explore in future posts.

But what I think may be the biggest impact will be on our physical landscape. It always strikes me as interesting that the physical landscape hasn’t changed all that much in decades, despite the fact that the way we work and communicate has changed dramatically thanks to information technology. Sure, buildings have more glass and cars have more rounded edges, but if you compare two photos from 50 years ago and today, it’s often hard to spot much difference in the landscape (besides a few outfit choices and smartphones).

With the AutoCar, our urban landscape is set to change in massive and wonderful ways. Certain fixtures will become obsolete, like parking garages, road signs, street parking and traffic lights. For most people, garages will be as anachronistic as stables, and will be reclaimed for more productive uses like extra bedrooms, playrooms or exercise rooms. Saying goodbye to these items will free considerable resources to reduce housing costs and improve quality of life.

And new urban designs and systems will be invented that leverage the flexibility of the AutoCar: providing transportation on demand, but getting out of the way when not needed. Apartments may have drive-throughs like at airports for embarking and disembarking from AutoCars. And micro-traffic tunnels will tuck AutoCars out of sight, much like the delivery vehicles of Disney World are all underground. Is it possible to make the surface streets on the island of Manhattan 100 percent car-free? I bet it will be debated before the end of the next decade.

Information technology is set to impact our physical world, and I am optimistic that the result will be vibrant cities and suburbs more wonderful than we can even imagine.

What do you predict AutoCars will change the most in your life?

In this series of posts, Influencers explain what they wish they could fix — and how. Read all the stories here and write your own (please include the hashtag #FixIt in the body of your post).

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME cars

Feast Your Eyes on Tesla’s Powerful New Car

The base price is $120,000

HAWTHORNE, Calif. (AP) — Tesla Motors CEO Elon Musk unveiled a new version of the luxury electric car maker’s Model S sedan that includes all-wheel drive and self-driving “auto pilot” features.

The open-to-the-public event Thursday night included free alcohol and test rides on an airport tarmac.

With more than 1,000 Tesla fans in the audience, Musk explained that the current Model S is a rear-wheel-drive car with one motor, but a new version will have two motors — one powering the front wheels and one powering the rear wheels.

All-wheel drive helps grip slippery roads and is standard on many luxury sedans. Analysts have said Tesla needed it to boost sales in the Northeast and Midwest, as well as Europe.

The company sold 13,850 cars in the U.S. this year through September, down 3 percent from a year ago, according to Autodata Corp.

Unlike all-wheel-drive systems on gas-powered cars, Tesla’s system improves speed, acceleration and mileage by optimizing which motor is used, Musk said.

The dual motor version of the P85 performance sedan will have a top speed of 155 mph, compared with the current 130 mph. It will accelerate from 0 to 60 mph in 3.2 seconds, akin to exotic sports cars.

“This car is nuts. It’s like taking off from a carrier deck,” Musk said at the municipal airport near Los Angeles where another of Musk’s companies — the commercial rocket firm SpaceX — is based. The crowd obliged with cheers and applause.

Tesla is also significantly upgrading its safety features through a combination of radar, image-recognition cameras and sonar.

The Model S will right itself if it wanders from its lane and brake automatically if it is about to hit something. Those features are offered on luxury competitors, as well as mainstream brands such as Ford, Hyundai and Toyota.

But Tesla is going a step further. Its new system will move the car over a lane when the driver uses the turn signal. It will also use cameras to read speed limit signs and decelerate accordingly. Volvo has a system that reads signs and alerts drivers if they are over the limit but does not change the speed.

Musk said “auto pilot” does not mean the car could drive itself — as he put it, a driver cannot “safely fall asleep.”

Pulling together all the driver-assist features impressed Brian A. Johnson, an analyst with Barclay’s. “It’s a year ahead of the timeframe I was expecting,” he said.

Raj Rajkumar, a pioneer of self-driving cars with Carnegie Mellon University, also was impressed but wondered how the “auto-pilot” would perform in different weather and road conditions.

The dual motor will be a $4,000 option on the base and mid-range Model S, which start at $71,000. The base price of the P85 with all-wheel drive — which will be known as P85D — is $120,000.

___

Associated Press Auto Writer Dee-Ann Durbin in Detroit contributed.

MONEY Autos

The $64,000 GMC Sierra Denali Shows How Pickups Have Gone Crazy Luxe

A powerful engine, a moon roof, USB ports and comfortable seating for five are all signs of booms in agriculture and construction.

Even in the darkest days of the American automobile industry, pickup trucks came through. Detroit couldn’t build profitable cars to save its soul, but pickups always delivered sales and profits.

In the last couple of years, with agriculture booming and construction recovering, the auto companies have been outdoing themselves to hang on to this lucrative turf. Ford is about to launch a new, aluminum version of its top selling F-150. Chrysler has had to increase production of its Ram 1500 to keep up with demand. Meanwhile, GM is about to debut two middleweight contenders, Canyon (GMC) and Colorado (Chevy).

GMC also rolled out new versions of its heavy duty 2500 and 3500 Sierra HD models that highlight another trend: the pickup gone crazy luxe. For the successful farmer who now pilots a climate-controlled, $325,000 John Deere 9370R tractor with mission-control computer display terminals, the fully-equipped Sierra Denali 2500HD that we tested might be no less than the minimum required. This diesel-driven, high-waisted brute feels more like a working Escalade, and at $64,000 for the crew-cab, diesel version, it’s priced in the neighborhood.

Who would drop $64,000 on a pickup? Look, I’m a car guy so I really can’t answer that question, but if I had to get up at 4 a.m. every day and do actual labor on a farm or ranch, or at construction sites, I’d like to think I’d earned a cushy ride. And in the Sierra Denali you’ll get one. Once you adjust to sitting a mile high and towering over mere cars — and in Manhattan (New York, that is, not Kansas) it’s kind of a cool perspective — you realize that the Sierra doesn’t feel like a truck. On the highway, it’s one of the quietest vehicles on the highway that I’ve tested this year.

That’s even more surprising considering that this particular Sierra Denali is powered by a 6.6 L V8 Duramax diesel tied to a 6-speed Allison Transmission. But this combo, odd to say, doesn’t shout its 397 h.p. worth of trucky-ness. Because the diesel delivers bigtime torque at low revs, (765 lb. ft. @ 1,600) the pickup’s power sounds more oceanlike as it gathers force. You’ll pay for that power, with the diesel package adding $8,845 to the standard price of $53,740. Since you are already in luxury car territory, why not throw in a power sunroof ($995), aluminum rims ($850), and 20-inch tires ($200)?

You are now styling in four-wheel drive and your buddies will appreciate it: You can fit four of them in the Sierra Denali 2500HD, and they will be properly seated in the more-than-roomy-enough crew cab. You, though, will have the best seat, one that’s heated and air conditioned and equipped with its own alarm system: The seat shimmies to keep you alert in slow traffic or if it senses you are drifting out of your lane. And because this is a work truck, the center console is loaded with storage for files, laptops, or even power tools; there’s also a power panel that includes USB ports, a couple of 12-volt ports, and a standard electrical outlet.

It would be silly of me to try to tow a trailer around New York City, but the Sierra Denali 2500HD can haul one weighing up to 13,000 lb. On the other hand, we did manage a brief four-wheel drive test on a rough patch of Harriman State Park about 50 miles north of New York. The fall foliage was beautiful and the pickup handled the high brush easily given its substantial ground clearance. I’d be looking forward to winter driving in this thing if I worked outside. Although I wouldn’t be looking forward to working outside.

MONEY Gas

Gas Prices Just Hit a Low for 2014

Gas Cans
Get it while it's cheap! NoDerog—Getty Images

Around the country, drivers are paying the lowest prices of the year for gas.

The summertime swoon for gas prices has continued into fall, and now it looks like the forecasts calling for lower and lower prices at the pump are right on track.

Earlier this week, AAA noted that the national average for a gallon of regular stood at $3.29 and that we were on the brink of matching the cheapest mark thus far in 2014 ($3.27, hit on February 9). Well, as of Wednesday, AAA data indicated the national average hit $3.267, a new low for the year.

What’s more, drivers in many states are paying well below the national average. The price of regular is averaging $3.10 or less in Alabama, Arkansas, Kansas, Minnesota, Mississippi, New Jersey, Oklahoma, South Carolina, Tennessee, and Virginia, and Missouri is cheapest of all, recently dipping just under $3 per gallon—the first state to average under $3 since January. Drivers in many metropolitan areas, including Kansas City, Duluth, Minn., Tulsa, Okla., and Iowa’s Quad City area, have been enjoying sub-$3 gas this week. The gas price-tracking site GasBuddy is also reporting that gas stations in no fewer than 18 states currently have prices that are the lowest they’ve been for all of 2014.

Best of all for drivers hoping to spend less on fill-ups, all signs indicate the trend for cheaper and cheaper gas will keep on rolling in the months ahead. AAA is predicting that the national average will dip to $3.20, perhaps even $3.10, by the end of the year, by which time as many as 20 states could see per-gallon prices drop below $3.

MONEY Autos

VW’s New Golf Makes the Case for Diesel

The redesigned 2015 VW Golf brings a quieter, more efficient diesel experience to the American consumer.

Diesel has been a dirty word in the American automobile industry for too long. We can’t seem to get the idea out of our heads that “diesel” means smelly, sluggish, expensive and, well, European.

And that’s always been perplexing to European car manufacturers, who have been continually improving the technology, making it cleaner and more efficient.

We may be entering a diesel renaissance in the U.S., however. Sales of diesel-powered cars increased 25% percent during the first six months of 2014, according to HybridCars.com. That’s in some measure because American car makers are increasing the number of diesel options. Chevrolet has added a 2.0L diesel option to its popular Cruz lineup, and more diesels are popping up in pickup trucks such as Chrysler’s Ram. Next year Chevy will add a diesel to its midsized Colorado and GMC Canyon midsized pickups. Mazda is also joining the party.

What’s driving diesel ahead? For one, diesel engines are much cleaner than in the past. Chevy’s Clean Turbo Diesel generates 90% lower nitrogen oxide emissions than earlier models, says the company. That makes environmental regulators happy.

But a 46 m.p.g. highway efficiency rating in the Cruz is what makes buyers happy — and it’s one reason the Cruz power plant was the third diesel engine to make WardsAuto’s top 10 engines list this year. The other two include the 3.0L V-6 turbo diesel that powers both the Ram 1500 pickup and the new Jeep Grand Cherokee; the 3.0L, 6-cylinder turbo diesel pushing both the BMW 535d sedan and X5 crossover rounded out the list.

Even better, the premium you have to pay for the diesel over a gasoline engine — the step-up price — is narrowing. In Volkswagen’s new 4-door Golf, for instance, the 2.0L TDI diesel version is priced at $21,995 for the basic S trim package compared with $20,695 for the 1.8L gas-powered model. “When you look at the step price vs. fuel efficiency, customers are seeing value,” says Doug Skorupski, powertrain strategy manager. The Golf diesel is rated 30 m.p.g. city/45 m.p.g. highway, making it 9 m.p.g. better on the interstate than then gasoline model. And some reviewers are reporting much higher figures for the diesel’s efficiency. On a practical basis, that means you can go weeks without filling the tank.

Does it pay to drive a diesel? Depends on how much you drive, how long you plan to keep your car and how much you beat it up. Diesels are more fuel efficient because you get more compression out of the engine and thus more power compared with gas. Diesel fuel is currently priced about 36c a gallon more than gasoline ($3.457 vs. $3.814, according to the U.S. Energy Information Agency), although that gap is narrower in some places, such as California.

At those prices, you’d have to drive about 100,000 highway miles to erase the premium you paid for the diesel engine. But diesels tend to be lower maintenance, and their resale value is higher, making total cost of ownership lower. “These diesel engines really like to work,” says Skorupski. “No matter how you tend to drive the vehicle, they maintain efficiency.” Translation: You can beat the hell out of them. VW says that 23% of its sales are diesels, but 45% of Golf buyers are choosing diesel.

VW has been selling diesels in the U.S. forever and recently launched its redesigned 2015 Golf, three versions of which come with the company’s TDI (for “turbo direct injection”) diesel engine. The new Golf, the 7th version of this venerable model, represents badly needed fresh merchandise for the VW portfolio, which has suffered in the U.S. for the lack of new product.

And the diesel version can easily make a case for itself. For one, the TDI answers one of the old issues about diesels, that their power isn’t matched by their acceleration. Engineers refer to it as torque curve; as diesels go up rpms, they lose their giddyup.

That’s not the case in the TDI. There’s more than enough torque available, even if the trip up the gears is noticeable on the DSG automatic transmission. VW has made this Golf about two inches longer, an inch lower, and half an inch wider. On the road, the TDI is one of the quietest cars I’ve driven all year. Inside, you may not be dazzled by the styling, but VW sedans have always been about function and value over silliness.

So have diesel owners in general. Remember those Volvo diesel owners you made fun of in the 1980s because of their cars’ sluggish performance? Those days are over. Road & Track reports that Volvo’s five-cylinder, diesel/electric V60 hybrid delivers more torque than a Lamborghini Gallardo. Sensibly, of course.

TIME Transportation

No, Carmaggedon is Not Inevitable

Los Angeles Traffic
Heavy traffic clogs the 101 Freeway as people leave work for the Labor Day holiday in Los Angeles on August 29, 2014. Mark Ralston—AFP/Getty Images

Zocalo Public Square is a not-for-profit Ideas Exchange that blends live events and humanities journalism.

From peak time tolls to smarter parking meters, some ideas that could get Angelenos moving

It makes sense now that the first movie ever filmed in Los Angeles was of nothing but traffic. The 30 seconds of shaky film, shot downtown on Spring Street in 1898, reveal the origin of an enduring issue for the city. L.A. is defined by its traffic, which is universally understood to move very, very slowly.

Today, drivers armed with smartphones use apps like Waze, darting on and off freeways to cut commute times by minutes. And this year, L.A. became the world’s first major city to synchronize all of its traffic lights. Yet in 2013, Angelenos still spent an average of 90 hours stuck in traffic. Could a recent infusion of $32 million for transit improvements in the city help recover this lost time? In advance of the Zócalo/Metro event “What Could Speed Up L.A. Traffic?” we asked transportation experts the following question: What innovations have other cities implemented that could teach L.A. how to speed up traffic?

Matthew Turner: The price of fixing congestion

When a bakery in the former Soviet Union opened in the morning, it gave bread to the first person in line, and then the next, until all the bread was gone. Everyone still in line had to wait for the next batch. This meant that if you were going to get your bread for breakfast, you had to get there early. So there were long lines for bread (like this one).

We do something similar to allocate access to roads. The government builds roads and every morning, the people who want to use them line up. If you are early, there is lots of capacity for you, and you have a speedy trip. If you come a bit later, the capacity is all used up, and you need to wait for road capacity to become available (like cars on this on-ramp).

The Soviet bakery had a line-up problem because bread was handed out free to the first in line. But what if we could price access to roads, just like we price access to bread today? If that were the case, queuing would no longer occur.

In a number of cities around the world—London, Singapore, Stockholm, and even a few highways in L.A.—local authorities make drivers pay to access roads at peak times (but not at other times). In response to a peak hour toll, drivers rearrange their travel schedules. As a result, driving speeds increase and travel times decrease. By constructing a system of tolls, or prices, that are higher for congested roads and times than for uncongested roads and times, we can fix the traffic congestion problem.

The price of reducing traffic congestion is pricing access to roads.

Matthew Turner is professor in the department of economics at Brown University. His research focuses on the economics of land use and transportation. Current projects investigate the relationship between public transit and the growth of cities, whether and how smart growth type development affects individual driving behavior.

Francie Stefan: Streets are a limited resource

Our streets are a limited resource, like water or energy. We can use this resource more efficiently by reducing the need for car trips or by making trips on modes that take up less space. To find a few tools that boost streets’ efficiency, Angelenos can follow the lead of the city of Santa Monica.

Since 40 percent of trips in L.A. County are less than two miles, we know that there are opportunities to convert some vehicle trips to walking, biking, and active transportation. In Santa Monica, basic street restriping was able to convert excess lane width (without reducing car lanes) into over 40 miles of new bike facilities. In only two years, biking increased by over 50 percent.

The best transportation plan is a good land use plan. Santa Monica is focusing housing and jobs near bus and rail networks, taking advantage of L.A. County’s historic streetcar routes and the walkable streets that grew from them. And Santa Monica is building strong first-mile/last-mile walking, biking, and transit connections to future Expo Light Rail stops.

Private industry plays an important role too. New businesses, employers, and residential buildings can help sustain trip reduction strategies by providing commuter incentives, facilities for active commuters (like bicycle stations featuring showers and racks), transit pass subsidies, shared parking, and telecommuting options. These amenities reduce household transportation costs as well as demand on the transportation network.

These strategies will provide a more holistic management of our street resources and “speed up traffic” by moving people in more ways, reducing the bottlenecks for everyone.

Francie Stefan is the transportation & strategic planning manager for the city of Santa Monica, which has set a target of no net new trips for evening peak periods to support more sustainable street function, encourage wellness through active living, and reduce GHG emissions.

Donald Shoup: Tax foreigners living abroad

Most people view parking meters as a necessary evil, or perhaps just evil. Meters can manage curb parking efficiently and provide public revenue, but they are a tough sell to voters. A new kind of meter, however, can change the politics of parking–and reduce traffic–by allowing cities to give price discounts for residents.

In Miami Beach, residents pay only $1 an hour at meters in areas where nonresidents pay $1.75 an hour. Some British cities give the first half hour at meters free to residents. Annapolis, Maryland, and Monterey, California, give residents the first two hours free in municipal parking lots and garages.

Pay-by-license-plate technology can automatically give discounts to all cars with license plates registered in a city. Cities link payment information to license plate numbers to show enforcement officers which cars have paid or not paid. Pay-by-plate meters are common in Europe, and several U.S. cities, including Pittsburgh, now use them.

Like hotel taxes, parking meters with resident discounts can generate substantial local revenue without unduly burdening local voters. The price break for city plates should please merchants because it will give residents a new incentive to shop locally. In big cities, the discounts can be limited to each neighborhood’s residents. More shopping closer to home might then reduce total vehicle travel in the region.

Parking meters with resident discounts come close to the most popular way to raise public revenue: tax foreigners living abroad. More money and less traffic will help any city.

Donald Shoup is distinguished professor of urban planning at UCLA, where he has served as chair of the department of urban planning and director of the Institute of Transportation Studies. His book, The High Cost of Free Parking, explains how better parking policies can improve cities, the economy, and the environment.

Doris Tarchópulos: Reimagining the suburbs

Each city has its own urban characteristics. The dimensions of the streets, the block size, the shapes of the lots, and the type of housing all differ depending on the city and its origins. North American cities are very different from Latin American cities, but they also have common features. From the mid-20th century, Americans in both the Northern and Southern hemispheres have left the core of the city and gone to the suburbs, which has caused car dependency and a crisis of mobility.

In Bogotá, Colombia, we are working on research to create a mix between the current suburbs and human-scale neighborhoods that can be traversed by walking and bicycling. We are thinking of repurposing suburbs gradually, introducing commercial strips along the main roads within neighborhoods, using parking lots or streets to foster vibrant community life, and at the same time, moving people back to the old quarters of the city center.

These ideas are easy to write about but difficult to implement. Reshaping cities demands political will and public conscience. But we also need new definitions of a city model based on a reimagined mobility system. Los Angeles has long been a traffic-clogged city, but given enough time and public support, the way people get around it could be transformed.

Doris Tarchópulos is an architect, associate professor, and director of the master in urban and regional planning at the architecture school of Javeriana University. She has published several award-winning books and scientific articles on housing and urban planning.

This discussion originally appeared on Zócalo Public Square.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Autos

Corvette Stingray: All American Muscle

TIME's Bill Saporito test drives the new Corvette Stingray and finds it's as fast and powerful as advertised.

The guy standing on the traffic island seeking donations didn’t want one from me. He just walked over to the car, gave the thumbs-up and then moved on to the unremarkable vehicle behind me.

The 2015 Corvette Stingray ZF1 convertible I was driving is the type of car that can do that. You park it at Home Depot and guys start circling, taking pictures. Parking lot attendants, who see everything on wheels, nod in admiration. New cars that attract this kind of attention are relatively few: The awesome Audi R-8 comes to mind, as do the recently remade Camaro and the old Jaguar XK8. Even that funky little Fiat 500 was a head turner when it first landed.

For Chevrolet, the Corvette is an iconic automobile and you redesign it at your peril. Yet as Ford proved with its Mustang this year, and Chevy itself with Camaro, you can remake trophy cars without denting their heritage. This Vette is a perfect example of heritage brought smartly—and swiftly— forward.

The Stingray did show up with a surprise: an eight-speed automatic with paddle shifters. The automatic trans adds $1,725 to the base price of $58,000, and the other goodies on the car I drove—including a performance data and video recorder—pushed the price up to $71,255. Who would want to drive a Vette with an automatic? Turns out, lots of people, and fully 65% of new Vettes being sold are automatics, according to the company. And it’s not just Corvette owners. Manual transmissions simply can’t match the efficiency of a new generation of 8-, 9-, and 10- speed automatics now being introduced into high performance cars. (In fact, the new Porsche GT3 isn’t available with a manual transmission. It rides a dual-clutch automatic called a Doppelkupplungsgetriebe.) The manual transmission is going the way of the manual window. Do you miss cranking?

Although I absolutely doppelkupplungsgetriebed at the thought of a stickless Corvette, any disappointment disappeared when I stomped on the pedal at a highway on-ramp. Very instant gratification. Chevy has equipped this Vette with its LT1 6.2 liter V-8 engine, the latest version of a famous power plant known as the small block V-8. In GM lore, this engine actually saved the Corvette when it was introduced in 1955, because sales had been languishing with the underpowered 150-hp engine then in use. The small block V8 put the muscle in muscle cars. This updated one has variable valve timing that deactivates cylinders when you don’t need them—say cruising when the tachometer’s barely pushing 1,500 r.p.m.—which helps the car’s impressive 29-m.p.g. highway fuel rating.

But when you want’em, all eight cylinders snap to attention and report for duty, ready to throw out 455-to- 460 h.p. —the higher figure if you get the optional multimode exhaust option ($1,195) that is exquisitely tuned to zoom. This Vette will get you from here to there—0 to 60 mph—in a throaty 3.7 seconds. The eight-speed automatic is even a tick faster than the seven-speed manual, although the thrill of rocketing up the speedometer is very much the same. And if you insist on shifting the gears yourself, go right ahead and use the paddles. Automatic or no, this thing is still low, wide, and nasty. The two competition seats in the Z51 version come with adjustable side bolsters to lock yourself in on tight turns.

It’s not all about speed, I guess. The Stingray includes a 5-position Drive Mode selector (Sport, Track, Tour, Eco, Weather) that adjusts the performance to suit conditions or your whims. And on nice days, there’s that drop-top, which can be popped while moving at up to 30 m.p.h. if you’d like to really show off.

Chevy is also making the convertible available on a supercharged Z06 racing model rated at 650 h.p. that it will introduce next year. Which is going to provide a whole new definition of driving with the wind in your hair. You are probably going to need that automatic. Because you’ll be too busy hanging on to your hat to work a stick.

Correction: a previous version of this story stated the Corvette has a dual-clutch transmission.

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