When President Obama tackles American angst over rising gas prices Thursday with a speech in Florida, here's one thing he didn't say: pain at the pump can be good.
But as grousing about gas prices grows into an American pastime, some experts say people lose sight of the benefits of rising costs. Consumers can even use it to their advantage at car dealerships, when they shop and in their investment portfolios.
That's not to say there isn't reason to be upset. Gas prices, up 8% since the start of the year to a national average of $3.59 per gallon, according to the Energy Information Administration, continue to pummel American consumer confidence. Drivers cut back on gas for the past 48 weeks, according to a survey published Wednesday by MasterCard SpendingPulse. "Every 1% per gallon increase in gasoline prices costs consumers about $1.1 billion over the course of a year," says Chris Lafakis, an economist who specializes in energy for Moody's.
But here are four ways higher gas prices might be a blessing in disguise:
Get a deal on a large car
Higher gas prices are bad news for one major group: car salesman -- especially those with an inventory of big automobiles. As prices rise, deals for gas-guzzling SUVs, large sedans and trucks will increase, as demand for smaller cars rises, says Peter D'Arruda, president of Capital Financial Advisory Group in Cary, NC. "If you want to buy a bigger car wait until the gas prices go up to $5 or $6 a gallon, he says. "But if you're going to get a small car get one as soon as possible."
Rising gas prices create added incentives for car manufacturers like General Motors and Ford to keep their prices down, especially in the face of Japanese competition from Hyundai Kia, Toyota and Honda. Alec Gutierrez, senior market analyst at Kelley Blue Book, says GM and Ford would be unwise to raise prices in this climate. In 2008 and 2011, when fuel prices last approached $4 per gallon, values of compact and hybrid cars increase by more than 20% in a matter of months, he says. If gas prices continue to climb, he says manufacturers will cut back on production for large trucks and SUVs. But he says, "Consumers seeking a fuel-efficient vehicle should buy now."
Forget the mall, shop online
Don't bother trying to find a spot at the mall. Shipping costs may be going up, but many experts say consumers can still snag better deals online, use their time more efficiently by price-comparing and scour a much larger inventory than even the biggest big-box stores can carry. "And you don't have to deal with lines and bad salespeople," says Yung Trang, president of TechBargains.com. Although some delivery companies like UPS upped their shipping costs in recent months, Trang says prices are still as good, if not better, online.
There's another way around those shipping costs, too. D'Arruda joined Amazon Prime for a flat fee of $79 a year, which offers subscribers free two-day shipping and free streaming. Sites like eBates.com and RetailMeNot.com have thousands of coupons and codes for shopping online, so there's no need to scan their barcodes at the cash register. "I have $3,000 worth of checks back using these sites in the last couple of years," D'Arruda says. "I never want my wife to find out about this because she's a real shopper."
Invest in oil and gas companies
Despite the oft talked about "pain at the pump" for consumers, the rise in energy prices shows that this is an export-led industry that continues to grow. Domestic crude oil production increased to 5.5 million barrels per day in 2010 from 5.1 million in 2007, according to the Department of Energy and, last month, the agency said production is expected to grow by 20% over the next 10 years.
As SmartMoney.com reported last month, Energy Select Sector SPDR (XLE), an exchange-traded fund, surged 19% during the fourth quarter of 2011, mostly due to the rise in oil prices, which will feed through to local gas stations. Some investors are in for the long-haul: D'Arruda has a Dividend Reinvestment Plan with Exxon Mobile (XOM) which has enjoyed many years of dividend increases since his college days. DRIPS are offered by about 1,000 companies and closed-end funds, and enable existing shareholders to purchase stock directly from the company, bypassing the broker and their commissions. Many companies allow shareholders to purchase stock at discounts to market rates.
Plan a staycation
One sure way to avoid increasingly punitive fuel surcharges on transatlantic flights: stay home. Adam Weissenberg, travel, hospitality, and leisure sector leader for consultant Deloitte, says, "It will cause most folks to spend less and travel in the U.S. -- especially at state parks and beaches." But as prices rise further he sees businesses like restaurants offering more "gas cards" for discounts at gas stations to entice customers. "Certainly, higher fuel prices will lead either to higher fares or more airline fees," says George Hobica from the fare-tracking site AirfareWatchdog.com. "We spent a lot of time getting on planes to go on vacation," D'Arruda says. "Here in North Carolina we have mountains on the left and beaches on the right, and D.C. is only five hours north."
For those who need to travel for work, Lytle says price-sensitive and jetlagged travelers skip airport car rentals, which can cost 20% to 30% more than a rental service in a nearby town.