- The Washington Times - Thursday, February 19, 2015

Despite steadily decreasing gas prices, potential car buyers say they will still factor in fuel economy and gas mileage for their next vehicle purchase, according to a new survey released Thursday by the Consumer Federation of America.

The stunning fall in global oil prices in recent months — from over $100 a barrel to $50 and below — has drastically cut consumer costs at the pump — and raised questions of whether Americans will drop fuel-efficient econoboxes and electric cars in favor of gas-guzzling SUVs. The CFA findings suggest the market shift, if any, won’t be that dramatic, because today’s buyers don’t expect the low prices to last forever.

“There’s a good reason why today’s carbuyers still believe fuel efficiency is important. They understand that gas prices always go back up,” said Jack Gillis, director of public affairs at Consumer Federation of America and author of “The Car Book.” “Clearly consumers want and are buying more fuel-efficient vehicles. Manufacturers who fall short of the standard do so at their own peril. They will clearly suffer in the market.”

Some 85 percent of the 1,007 American consumers surveyed in the poll said gas mileage will be an important factor in their decision about the type of vehicle they will buy, and 56 percent say it will be “very important.” The target mileage for those purchases was 29.9 mpg, compared to an average of 24.2 mpg of their current vehicle.

The results of the study come as less fuel-efficient cars dominated in auto industry sales in January. Some 54 percent of the more than 1.51 million vehicles sold during the months were pickup trucks, vans and SUVs. Ford Motor’s sales jumped 15.3 percent fueled largely by an increase of truck sales. Ford’s Explorer crossover SUV was up 28.2 percent, far better than the company’s more fuel-frugal Fiesta and Fusion lines.

Jeep reported having a 44 percent increase in sales of the compact Jeep Cherokee for January. Over 72.5 percent of Chrysler’s sales were trucks and SUVs.

Gas is one of the largest expense in a household budget and some projections see fuel prices remaining low for the next 18 months. But the CFA survey suggested consumers are still taking the long view, and can foresee prices returning to $4 a gallon down the road.

“Consumers are smart and have long memories,” said Mr. Gillis, “It’s no surprise that they still want more fuel efficiency even though today’s gas prices may be low.”

According the survey, respondents expect the average gasoline price to rise by more than 55 percent in the next two years and by 90 percent in the next five years. Expectations are in line with past experiences and trends in the oil and automobile industry.

In 2009, when the monthly average price of gas was $1.84 a gallon, consumers bought more lower-mileage vehicles. Owners of these low-mileage cars were at the pumps more and spending more as a result, spending approximately $153 in the first month for gas. Five years later, the average price per gallon was up to $3.36 and the expense per month nearly doubled to $268. In that five-year period, buyers of vehicles that got 15 mpg would have saved over $6,400 had they purchased a vehicle that got 25 miles per gallon.

“Not only do these consumer expectations match the last major dip and rise in the gas prices, but they show that consumers understand when gas goes down, it inevitably goes back up,” said Dr. Mark Cooper, CFA’s Director of Research.

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