Both new and used car shoppers in this country made major changes in their sentiments about gas prices, their vehicle choices and purchase timing, according to the results of a just-released online survey conducted by Kelley Blue Book.
Back in February, KBB found that four out of five car shoppers said that rising gas prices had influenced their vehicle criteria. This time around KBB found that the number of respondents who said gas prices changed the vehicles on their shopping lists had dropped to just one-third.
As gas prices rise, consumers tend to get comfortable with paying higher prices. But KBB found that in spite of recent declines, gas prices continue to exceed consumers' comfort-level. The current optimal price for gas has risen since the start of the year from $3 a gallon to the current $3.27, with an acceptable range of up to $3.44. Therefore, if prices hover around $3.27 per gallon, car shoppers would not likely make major changes in their vehicle criteria. But at $4 a gallon, two-thirds of consumers feel that gasoline is so expensive it will impact their auto consideration and at $5 a gallon, nearly all shoppers said their vehicle consideration would be affected.
The average price per gallon for all grades of gas has been above $3.50 since the beginning of March, says the US Energy Information Administration. Its report on June 2 said that the average gas price for all grades had fallen for the third straight week to $3.84 a gallon.
The KBB survey also found that consumers are feeling better about their overall current economic situation. The number of respondents who rated their personal economic situation as poor decreased slightly from February, to one in five. KBB reported that respondents who indicated a poor economic situation were more likely to say they needed a vehicle with better fuel economy and that good mpg was the top reason in their purchase consideration.
Fewer consumers also said they plan to delay buying a new or used automobile, the latest KBB survey revealed.
"Prices at the pump have halted their steep rise and now gas prices are slowly going down in many parts of the country, and the latest kbb.com survey results show that car shoppers are taking note," said KBB's Jack Nerad, executive editorial director and executive market analyst.
"If consumers feel more optimistic about the near-future state of gas prices and more confident in their personal economic situations, this will bode well for the automotive industry," Nerad said. But he cautioned that declining home values are a continuing concern and vehicle availability caused by Japan's earthquake could blunt gains expected from better car-buyer confidence.