Irvine-based Kelley Blue Book’s latest Market Intelligence study found that more car shoppers are taking the cost of gas into consideration when purchasing a vehicle, and more respondents report that high prices have influenced their driving habits.
Seventy percent of the new- and used-car shoppers polled said that gas prices have affected their selection of a vehicle, while another 43 percent of respondents said they have delayed a purchase due to economic concerns and gas prices. And, more than half of those surveyed – or 51 percent – have reduced or entirely stopped some activities, such as vacationing, going out to eat, shopping and some entertainment.
The study also found that about 61 percent of those surveyed already have changed their driving habits as a result of increased gas prices, and many indicated that they would consider making trade-offs on their next vehicle for better fuel economy. Forty-eight percent said they would consider a different engine size; 36 percent said they might change the size of the car; and 31 percent said they would change the category of the auto.
Meanwhile, about 75 percent expect gas prices to increase in the next 30 days, and official data isn’t proving them wrong; in fact, the U.S. Energy Information Administration projects that prices will rise throughout 2011 and into 2012.
"The uncertainty of gas prices combined with the government-mandated increase in Corporate Average Fuel Economy (CAFE) have most automakers preparing both small and fuel-efficient vehicles for their future lineups," said James Bell, executive market analyst for Kelley Blue Book's kbb.com.
In addition, the survey looked at the level of “price sensitivity” car shoppers will tolerate before they change their preferences. Kelley Blue Book used the Van Westendorp Price Sensitivity Meter pricing model and discovered a clear correlation between gas prices and alternative-fuel vehicle consideration among car shoppers: As costs rise, consideration of more eco-friendly autos also increases.
The optimum price point was determined by the survey to be $3 per gallon of gas, with acceptable numbers falling between $2.75-$3.25. This means that as long as gas remains around $3 per gallon, car shoppers aren’t likely to make big changes to their vehicle-consideration criteria. However, if gas should rise to around $3.50 per gallon, more than half of consumers said it would affect their selection of an auto. At $4 per gallon, 80 percent of car shoppers said it would affect their consideration, and at $5 per gallon, nearly all – 95 percent – of car shoppers would change their plans.
"It is clear from the latest Kelley Blue Book Market Intelligence data that gas prices have a definite impact on the vehicle choices made by new-car shoppers in the United States," said Bell, "and it seems that the price of gas also will help determine the success or failure of many new alternative-fuel vehicles now set for production."
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