Rising Gas Prices Affect New and Used Car Sales
Gas prices continue to rise, changing U.S. consumption habits, driving habits and car-buying habits. According to the DOE, regular gas climbed to an average of $3.79 last week, 10.7 cents higher than the week before and 93.3 cents (33 percent) higher than a year ago.
Diesel prices jumped 10 cents to $4.08, 11 percent higher than last year in the Midwest, which got hit hardest in the overall increases. There’s plenty of inventory, but futures and speculation are driving the rises.
Higher energy costs push up the price of everything, and “accounted for nearly all” of the rise in the March producer price index. As we have been reporting, the price of used cars—particularly late-model fuel-efficient ones—has been skyrocketing. Auction prices for cars like the Civic, Corolla and Focus jumped 11 percent last month alone. It’s the tightest used-car market in 20 years. Check our DealFinder to see what’s going on.
Americans seem to be responding to the higher gas prices with increasing pessimism about President Obama and the country’s future, by driving less and cutting back on expenses. This, according to a Reuters/Ipsos poll taken yesterday.
Another poll, by Kelley Blue Book, asked “What actions are you taking to cope with rising gas prices?” Of the respondents, 49 percent said, “Can’t do much, I just have to deal with paying more at the pump”; 26 percent said, “Bought or looking to buy a more fuel-efficient vehicle.”
Are people driving less? Well, the gas station chains say that sales are down 3 percent or more, and there is some evidence of increased car-pooling and use of public transit. But Americans don’t get over their addiction to cars easily, even though many were forced to park them in 2007, when the last gas crisis hit.
It’s too early to tell how long gas prices will stay high, but global demand is increasing, so don’t bet on any quick decline.
Have you cut back on your driving as a result of rising gas prices? Tell us how.