In the past few weeks oil prices have reached nearly $50 a barrel, both a record and a sure sign of things to come. What's coming? Little tiny cars that will change our homes, roads, and national priorities -- cars we should have adopted years ago.

Consider the streets of Rome, many of which are old, narrow and filled with motor scooters, motorcycles, and tiny cars powered by gasoline at $5 a gallon.

By "small" cars I do not mean what we in the U.S. think of as compacts. Think smaller. Much smaller. How about a car that's less than nine feet long overall, seats two -- and gets 60 miles per gallon in town and 75 on the highway?

I suspect the first reaction to such cars is that while the gas mileage is great, they're simply too small for U.S. roads. It's not true. In Italy you routinely see tiny cars on the Autostrada, the equivalent of our interstate highways, and while small vehicles are surely not the fastest cars on the road, they're fast enough and get where they're going, fast enough to breach most U.S. speed limits. As to safety, you wouldn't want to get hit by a truck in a small car -- but then you wouldn't want to get hit by a truck in an SUV, either.

Look at how you use your car. How many trips to the mall require a six-passenger vehicle? How many commutes are made by individual drivers? How will your lifestyle change when gas tops $50 a barrel?

The inevitable fact is that limited oil production, transportation and refining capacity will cause gasoline prices to rise. As higher prices become the norm, consumers will look for ways to avoid massive gas bills. Small cars will be coming to your town -- and it's a good thing because the case for small cars is overwhelming.

• Being small, they're cheap to buy.

• Getting great gas mileage, they're cheap to own.

• Small cars come in two-seat and four-seat models and even as mini station wagons. There are also three-wheel trucks for city deliveries. With three wheels you can park just about anywhere.

In terms of real estate, with small cars a garage can hold a vehicle (and maybe two in a space measuring 12 x 22 feet) and still have room for tons of storage. It will be easier to buy a home because less income will go for transportation and car debt. Many households will inevitably have a "fleet" of cars -- small ones for everyday driving and a big one for trips or major hauling. Builders, in turn, will change home designs to accommodate small vehicles. The cost to heat and air condition houses in some areas will decline because there will be reduced oil demand.

No less important, we are soon to get small cars for the very simple reason that such vehicles are in the national interest. If our domestic car fleet got 35 miles per gallon, oil prices would plunge with reduced demand, less money would go overseas (thus protecting the value of the dollar) and we would be less dependent on oil-producing nations -- some of which are politically unstable, grossly undemocratic and utterly hostile.

The need for smaller cars is hardly new. Go to a historic auto rally and you can see that today's vehicles are minuscule when compared with the behemoths we produced in the 1960s. We've shrunk vehicles before and we can do it again.

Jimmy Carter said in 1977 that higher energy costs were the "moral equivalent of war." The tragedy of Carter's statement is that it was largely ignored. We went small, but not small enough. We downsized, but then vans and SUVs came into the picture. With the price of oil now rising, small is no longer an option, it's inevitable and it will change the way we drive -- and the way we live.

For more articles by Peter G. Miller, please press here.

Published: August 24, 2004

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Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .