With low gas prices, do car buyers still care about fuel economy? Yes. A lot.(Read article summary)
The recent drop in gas prices has led many analysts to believe that sales of fuel-efficient gasoline models, hybrids, and even plug-in electric cars will take a nosedive. But car buyers expect gas prices to increase eventually, so they still prioritize fuel efficiency, according to a new survey.
The recent drop in gas prices has led many analysts to believe that sales of fuel-efficient gasoline models, hybrids, and even plug-in electric cars will take a nosedive.
It's assumed that as potential savings decrease, consumers become less interested in green cars.
However, some evidence suggests that it's not nearly as clearcut as that.
A new survey from the Consumer Federation of America (CFA) found that buyers expect eventual increases in gas prices, and thus still value fuel efficiency.
Consumer Gas Price Predictions Match Gas Price History (Consumer Federation of America)
Results showed that respondents expect gas prices to increase significantly--from about $2.14 to $3.20 per gallon over the next two years, and to $3.90 over the next five years.
Most respondents indicated that prediction would influence their next new-car purchase.
Among the sample, 86 percent said gas mileage will be "important" in their next purchase, and 57 percent said it would be "very important."
The CFA's own analysis of gas prices over the past five years confirms that is a good attitude to have.
Assuming an average gas price of $1.84 per gallon in January 2009, and $3.36 in December 2013, researchers claim consumers lured by low prices at the time of purchase got stuck with high costs in the long run.
Over that period, they estimated that the owner of a car averaging 15 mpg would spend just over $6,000 more on fuel than with a 25 mpg car--$16,080, compared to $9,660 for the more-efficient model.
Total Five-Year Gas Costs 2009-2013 15 MPG Vs 25 MPG (Consumer Federation of America)
Researchers expect a similar trend going forward.
Comparing vehicles returning 18 mpg and 28 mpg using January 2015 average gas prices, they estimate monthly fuel costs at $172 and $103, respectively.
However, the spread is expected increase by December 2019, with fuel costs for the 18 mpg car rising to $325, and a less-substantial increase for the 28-mpg car to $195 per month.
That yields five-year totals of $16,023 for the 18 mpg car and $9,614 for the 28 mpg car--very close to the figures for 2009 through 2013.
Regardless of gas prices and purchasing priorities, though, virtually all new vehicleswill see an increase in fuel efficiency as manufacturers work to meet stricter Corporate Average Fuel Economy (CAFE) standards.
These standards call for a fleet average of 54.5 mpg by 2025--which translates to roughly 42 mpg in the real world.