Sales of Small Cars Suffer as Fuel Prices Remain Steady
It’s not exactly a state secret that the Obama administration wants to transition Americans to smaller, more fuel-efficient vehicles. The U.S. Department of Transportation and the Environmental Protection Agency recently released a plan to raise the mileage of the light-duty vehicle fleet to 35.5 mpg by 2016, but the key ingredients to selling small cars is obviously consumer demand.
That demand has fallen as gas prices have stabilized, with the last year demonstrating that Americans’ car-buying habits are bound tightly to how much they’re paying at the pump.
Kelley Blue Book reports that used small cars have dropped in value the most on the resale market, with the overall weakest segments being subcompact, compact and hybrid cars. The value of compact cars rose 17% from August 2007 to August 2008 but has dropped 15% since then.
Meanwhile, trucks and SUVs tell the opposite story. The bottom fell out for big vehicles last year when gas topped $4 per gallon but since the summer of ’08, prices have fallen and remained stable over the last few months. The average price for a gallon of regular gas was $2.55 today, down from $2.63 a month ago and well below $3.83 from a year ago, according to AAA.
The example of pickups is telling: That segment’s value fell 18% from the August ’07 to August ’08 and has since made up the ground, rebounding by 23%.
Long-term thinking just doesn’t dictate what people will buy at any given time. As many have pointed out, if the federal government really wants people to start thinking fuel economy and to pay a premium for that technology, it will have to devise a way to give consumers a stable notion of what gas will cost.
Small Used Cars Aren’t Big Sellers as Gas Stays Cheap (USA Today)
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It's funny how that works. A year ago I when I was paying above $4.00/gal ($60.00+ fill/ups) I was contemplating turning in my mid-sized car for a compact. Now with gas being lower (around $2.60/gal in my area) I’ve now all but abandoned the idea of it. I don’t have a problem with small cars I just prefer the space of mid-size vehicle.
Give Obama time.Federal fuel taxes will eventually bring gas to $3-4 a gallon permanently.This would insure sales of small vehicles that he wants to promote.
(how else will he pay for all these bailouts he's been throwing around)
I say, bring on the higher gas taxes! It would be a great way to raise money to service our ludicrous amount of debt, as well as encourage lower gas consumption through smaller cars, hybrids, diesels, mass transit, biking and walking... its a big win, but someone we have to find a way to make business tax exempt for a while so that they don't suffer as a result of higher fuel costs in the immediate future as they figure out a way to lessen fuel costs.
Yes!!! I can finally order that Hummer!!Oh wait...Obama will probably out law those too. I will never drive a small car no matter how high gas prices get!
Obama and Congress say we need to reduce our dependence on foreign oil, they say we need to drive cars with better fuel efficiency, but they don't give us an incentive to buy more fuel-efficient cars. Raising gas taxes would definitely give Americans the incentive necessary to buy smaller, more fuel-efficient vehicles. Until then, sales of SUVs and pickup trucks will continue unabated.
* http://www.cardealerhorrorstories.com *
Raising gas taxes would also give Americans the incentive to kick those politicians out of office.
Yeah...like Obama
My concern is safety, I am not going to buy a huge SUV/Truck because I don't need it, but I would feel safer in a Escape/Tribute, Equinox, or a sedan like the Mazda 6.
Stephen-
I believe it is fair to say that the present administration wants people to drive more fuel efficient cars, but not that they want them to necessarily be smaller. There you are making an unfounded assumption.
Certainly if higher fuel efficiency came without reducing vehicle size (by using more hybrid engines or whatever) there would be no objection to that.
Isn't it weird that Ralph Nader used to champion getting rid of these suicide clown cars? Has anyone downsized trees and I missed it?
If gas is cheaper than diesel then why Americans use gas than diesel ? It varies from man to man who wants to drive with gas who drive with diesel.
http://www.createfreeblogs.com/smashing/38719/High+Fuel+Prices%3A+-+A+Boon+in+Disguise+.html .