High gas prices are impacting drivers' lifestyles and vehicle choices.
Rising gas prices are impacting Americans' lifestyles, leading many car owners to adjust travel plans, tighten their budgets, and lean toward purchasing small, fuel-efficient vehicles. These are the findings of a recent online survey conducted by the Consumer Reports National Research Center.
The responses also show that most drivers have accepted the new reality of $3-a-gallon gasoline. In fact, 72 percent of respondents expect fuel costs to be even higher in a year and 50 percent are prepared to pay $4 a gallon, according to the survey that included 2,459 adult drivers and was conducted from May 3-5, 2006.
PRICES IMPACT LIFESTYLE
In the past five years, gasoline prices have jumped 250 percent, according to data from the U.S. Department of Energy. The financial impact on our survey group is significant, based on their average of 13,199 annual miles driven and 21.9 miles per gallon. At current prices, their driving behavior translates to an average annual gasoline bill of $1,780, or $1,000 more than what the bill would have been five years ago ($710).
In the short-term, consumers reported little flexibility to reduce their driving related to commuting or personal/family transportation. So to compensate for higher fuel bills, drivers are adjusting their lifestyles and household budgets in a variety of ways:
- 42 percent of respondents strongly agreed that they will drive less
- 39 percent will change vacation plans
- 38 percent will spend less money in restaurants and on entertainment
- 38 percent will drive more smoothly to increase fuel mileage
- 36 percent reported that they will have more difficulty paying for essentials like food and health care.
Despite the hit to the wallet, few claimed they would seek alternative transportation, such as bicycle, carpool, or public transit.
Overall, 84 percent of consumers indicated that they took action in the last month to compensate for the elevated gasoline prices. Two-thirds shopped around for better prices at the pump, with 31 percent choosing a lesser-known petroleum brand. Almost as many, 28 percent, used the Internet to compare gas prices.
DRIVEN TO FUEL-EFFICIENT VEHICLES
Thirty-seven percent of respondents said they were considering replacing their current vehicle for one with greater fuel economy. The percentage was highest among younger drivers (18-34 years old) who have a lower income and drive more miles per year.
Nationwide, 55 percent of those who may replace their vehicle are considering a small car, more than 2.5 times the share of those looking at a family sedan or small SUV—the next most-popular vehicle types. The desire for a small car was common across the board, regardless of gender, age, income, or region. In contrast, large SUVs are on the shopping list for only 1 percent of survey respondents. This trend signals an imminent shift in vehicle purchases that will change the automotive marketplace, should prices at the pump continue to escalate.
GASOLINE ALTERNATIVES
Consumers are attracted to the promise of alternative fuels and powertrains, but their desire may be years ahead of the market. One surprising result was that of those interested in replacing their current car, only 54 percent are considering a traditional gasoline replacement. This compares with 96 percent who currently drive a gas-powered vehicle.
Viable alternatives to conventional gasoline-powered vehicles, however, are still relatively limited. The most practical approach is to first decide on the type of vehicle that's best for your needs and then look for the most fuel-efficient models in that category. By shopping smartly, you can save hundreds of dollars a year on fuel even with a conventional gasoline vehicle.
Although
gas/electric hybrid vehicles (see the free report, available at
ConsumerReports.org) now make up only about 1 percent of the market, 50 percent of the respondents said they would consider a hybrid for their next purchase. Better fuel economy (98 percent) dominated their list of "very important" factors, followed by good reliability (82 percent) and owner-satisfaction ratings (74 percent), and the societal benefits of reduced U.S. oil consumption (70 percent) and minimized environmental impact (64 percent). Tax incentives were rated very important by 46 percent, suggesting their availability may have a measured impact in hybrid sales in the future. Those who are not considering a hybrid cited the vehicles'
higher purchase prices (see
ConsumerReports.org) (16 percent) and concern about service and maintenance costs (15 percent) and reliability (15 percent) as the most important factors.
Although there are only a handful of hybrids on the market, they can vary dramatically in price and fuel economy. As when comparing any vehicles, we recommend looking carefully at all aspects of a hybrid before buying.
Flex-fuel vehicles, which can run on either gasoline or ethanol fuel, appeal to a significant 34 percent of those considering a new car. Although there are millions of flex-fuel vehicles on the road today, the most common ethanol fuel—E85—is mainly available in the Midwest. It can be hard to find in other parts of the country. Moreover, on a cost-per-mile basis, E85 is typically more expensive than gasoline.
Eight percent are interested in diesel cars, despite limited vehicle choices today. Diesel cars typically get about 30 percent better fuel economy than a similar gasoline vehicle, but they emit more NOx (nitrates of oxygen) emissions, which contributes to smog, and particulates (soot), which has been linked to respiratory problems. Because of clean-air regulations, they are not available in all states. Reformulated, lower-sulfur diesel fuel is expected to go on sale this fall, however, enabling cleaner-burning engines and likely more vehicle choices in the future.
THE ROAD AHEAD Overall, the survey responses indicate that should prices continue to climb in the months and years ahead, there will be a clear change in driver habits, on and off the road. Further, the automotive landscape will continue to shift away from large vehicles to smaller, more fuel-efficient cars.
