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Rising Fuel Prices Shifts Buyers to Fuel Efficient Cars

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author photo by Autotrader January 2011

Gas prices are rising – and car shoppers are already taking note. According to Kelley Blue Book's Market Intelligence survey, 70 percent of car shoppers say they've shifted their vehicle considerations due to rising fuel prices, a number which could have a significant effect on demand for both new and used cars.

According to the survey, larger cars are quickly fading from customers' minds. More than 30 percent of respondents indicated that rising gas prices would drive them to change the category of vehicle they're considering, like switching from an SUV to a sedan. Nearly 40 percent said they'd consider downsizing within the same category, like switching from a large SUV to a small SUV, while nearly half of respondents indicated rising gas prices would lead them to consider smaller engines. Of course, with rising gas prices, many consumers have also included electric and hybrid vehicles to their list.

"As gas prices increase, consideration of alternative-fuel vehicles also increases," said KBB, in a statement. "The analysis also determined that … the speed and amount by which gas prices increase also affects the changes in interest of alternative-fuel vehicles."

The study also examined what gas prices consumers were most comfortable with – and what prices would cause serious shifts in vehicle consideration. According to KBB, shoppers are unlikely to make major reconsiderations with gas at $3 per gallon, but a shift to $3.50 drives more than half of consumers to consider other options. And at $4, an astonishing 80 percent of car shoppers would rethink their considerations – a number which jumps to 95 percent at $5 per gallon. But don't worry: if gas prices do keep rising, automakers have the tools for the job.

"The uncertainty of gas prices combined with the government-mandated increase in Corporate Average Fuel Economy (CAFE) have most automakers preparing both small and efficient vehicles for their future lineups," explained James Bell, executive market analyst for Kelley Blue Book.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Rising Fuel Prices Shifts Buyers to Fuel Efficient Cars - Autotrader