The current economic situation and spiking gas prices are raising concerns among consumers and impacting their car-buying criteria, according to a new survey from Irvine-based Kelley Blue Book.
The Market Intelligence report shows that 81 percent of those polled in February said that rising gas prices have influenced their purchasing decisions, up 11 percentage points from the previous month. This has lead to increased interest for fuel-efficient and alternative-fuel vehicles on kbb.com, with the compact-car segment rising 9 percent month-over-month. It's the largest increase in any segment, according to the study.
"Consumers frequently make long-term decisions, like buying a vehicle, based on short-term information, like today's fuel prices," said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book's kbb.com. "We've seen rising fuel prices affect shopping behavior at kbb.com many times before, and we're seeing it again today.”
When asked about their future vehicle purchases, 58 percent of survey respondents said the state of the economy has lead them to consider downgrading, with 42 percent saying they’d select a smaller engine size. Another 40 percent said they would purchase a smaller vehicle; 37 percent would consider fewer or no added vehicle options; and 33 percent would switch from new to used.
In addition, 27 percent of respondents indicated their economic situation was poor; the number rose 7 percentage points from January. Of those individuals, 21 percent said the top reason for planning to buy a new car was better fuel economy.
“The increased interest in fuel-efficient vehicles and decreased interest in larger 'gas guzzlers' typically foreshadows corresponding changes in buying behavior, and we expect the pattern to continue if gas prices continue to trend upward in the coming months," said Nerad. "As a result, auto manufacturers need to not only prepare products that anticipate long-term trends, but also be prepared to cater to short-term variations in consumer demand."
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