Gas Now Below $3: Ready to Buy a Hummer Yet?

Gasprices

As the national average price for a gallon of gasoline hit $2.92 today — and it’s expected to keep falling — we’re left wondering if the price decrease will have any impact on drivers. Demand has continued to drop, down 9.7% in the federal government’s latest reporting from early October, despite lower prices.

The down economy seems to be the No. 1 reason why drivers are cutting back today; it was this summer’s high gas prices that started a downward trend in demand. 

Whatever the reason, there has been no sign from consumers that they’re shifting back to large SUVs and trucks. It seems that $4 gas, even if temporary, made its mark on car shoppers.

Gas prices reverse course, fall below $3 (USA Today)

By David Thomas | October 20, 2008 | Comments (10)
Tags: In The News

Comments 

Cj

I don't think people are going to go back to traditional large SUVs. Consumers will probably start buying crossovers and minivans again, though.

I think consumers have learned that gas prices aren't stable and I think more people are concerned about the environment than ever. The days of Hummers, and Expeditions are over IMO. I mean why get an Expedition when you can get the more fuel efficient cheaper Ford Flex?

I also don't believe that the luxury car market will rebound. Most people that were getting lux cars were leasing them and couldn't afford them anyway. Now that most automakers (especially the Germans) are cutting a lot of there leasing, people that want the image of a German luxury car won't be able to afford a new BMW or MB.

Also like I said above consumers are more sensible now so those that might have gotten a Lexus ES, might settle for a Camry. Note that I'm not saying those people couldn't afford to get a Lexus, it's just that in these intense, unsure economic times people are NOT going to be spending as much as they used to. Especially people in the middle class.

Adam

I second Cj's comments

Bowrider

Concur.

Luxury isn't going to be as badly hit IMHO. Audi had been showing record sales up until the past two months. and will probably still have an up 2008. BMW is going to have some issues with leasing for sure and Mercedes was already showing problems with its product mix (R and CLS classes etc). But the C class is still selling well.

But I think a lot of buyers in these classes are actually more immune to the economy problems than others. Besides those folks overextending that you guys mentioned.

ziggy

Haves and have nots. The haves will still buy luxo models and have nots will either not buy, buy useed or buy cheap. Gas prices are not the factor now, it's the economy.

Bowrider

DT,
I understand where you are coming from, but the WSJ has reported in a couple recent articles that all consumers are cutting back, including the wealthy. IMO, automakers should return to options that can be piecemealed and vehicles ordered, accordingly. If you want a Cobalt, it shouldn't come standard with PW, PL, etc. Consumers are spoiled and many have overstretched their budget to keep up with the Jones and are now in over their heads. Generally speaking, Americans are coming to their economic senses.

Juan Carlos

what happens to those who bought chryslers to get $2.99 gas?

Juan Carlos

cj mentioned how people would buy a camry instead of a lexus in these rough times. while the lexus does have a better warranty, built better with better materials, higher resale value, etc etc, some lexus models at the end of the day are nothing but toyotas in a tuxedo. same with some infnity/nissan or lincoln/ford.

now the question is if having better steering and an nicer cup holder is worth that extra 5k-7k dollars. for some it will be and for others it won't. and with some people struggling to get the chevy, how could they get the cadillac. the honda pilot is nice, then why get the acura mdx? again, the luxury brand is better, but for some it won't be that much better.

Cj

There's actually an article posted today about how luxury brands won't be immune to the auto sales slump at the Wall Street Journal.

http://online.wsj.com/article/SB122443910753248171.html

DL

why are we Americans so short sighted and buy into the media hype/hysteria so easily?

gas prices have always fluctuated (and stock prices for that matter) with a huge swing every few years. why does everyone think that "this is going to be the big one" that's so special compared to historically similar events?

I'd like to echo Juan Carlos's musing -- and also add that there are those who stockpiled gas or bought into other such doomsday-readiness gimmicks. simply buying a more fuel-efficient car and cutting down on unnecessary car trips ALWAYS works in everyone's and mother earth's favor.

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