Car Buyers Won't Change Habits Until Gas Hits $6.51 A Gallon
Rising gas prices are changing consumers habits, but not the way you may think
The Autotrader.com survey reveals that many Americans have grown numb to the constant drumbeat of higher gas prices, says Rick Wainschel, AutoTrader vice president, automotive insights.
"People are coming to grips with higher prices of gas," Wainschel said. "They are concerned with fuel prices, but they expect gas prices to remain high."
While most consumers say a new vehicle's fuel efficiency is important, saving money and helping the environment was not the top reason for buying a new vehicle, the survey showed.
Furthermore, the price of fuel would have to rise considerably before many would seriously consider a vehicle that got better fuel economy.
According to the survey:
-19 percent said they would need gas prices to be $4 and $4.50 for them to change their buying habits
-7 percent said it would have to be $4.51 and $5
-18 percent said it would have to be between $5 and $5.50
-11 percent said it would have be $5.51 and $6
-10 percent said it would have to be $6 and $6.50
-35 percent said it would have to be over $6.51
"The mindset is shifting," Wainschel said.
Other industry experts said other factors could come into play when it comes to pain at the pump, such as when consumers see their single tank filling top $100.
"People are getting accustomed to high gas prices and are adjusting the way they spend their money," said Eric Lyman, vice president at ALG, which is part of TrueCar.com. In 2008, when gas prices spiked to over $4 a gallon, which spurred big sales in fuel efficient cars.
"That was a shock to the system, and it directly impacted consumer behavior," Lyman said.
This time, however, the prices have slowly grown higher and higher. GasBuddy.com predicts that the national average for a gallon of gas could climb to as high as $4.35 by the end of April. According the Gasbuddy.com's website, the national average is $3.92 per gallon.
And while consumers may have grown apathetic toward higher gas prices, some say the rising price of gas is helping carmakers sell even more vehicles.
Aaron Bragman of IHS Automotive used the example of a person who owns a five year old Buick Park Avenue that gets 26 mpg trading it in for a 2012 LaCrosse with eAssist that gets 36 mpg.
"That's a 40 percent increase and something people will notice immediately in their pocketbook," he said.
Additionally, Bragman points out that the average age of a vehicle on the road is older than ever before and those less efficient vehicles are likely to be swapped out for more efficient models, no matter what type of vehicle the consumer chooses.
"There are a lot of reasons the new car market is doing so well right now," Bragman said.
Credit has loosened up, trade in values are high and the used car prices are extremely high. All of that is likely to push more people into a new car.
Wainshel is equally as optimistic.
"Things are improving and consumer confidence in the future is one of the reasons we're seeing such strong sales," he said.
But don't expect the floodgates to open for highly efficient small cars. That segment will grow, but it won't be only because of high gas prices. Not until those prices get really high.
Consumers are just used to it.
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