Drivers already feeling oil price rise

The LA Times’ car blog says drivers are again reacting to rising gasoline prices. While the average for the state on Friday was $2.96, prices above $3 have been spotted at some gas stations, and a recent survey shows drivers are taking note:

Kelley, the Irvine-based auto information firm, surveyed new car shoppers last month about gas prices and found that more than 60% have changed their buying approach because of rising pump prices, with many saying they would make compromises in their choice of a new vehicle in order to save money on gas.

The No. 1 compromise was moving to a smaller engine (a four-cylinder, say, instead of a V6 or V8). That was followed closely by vehicle size (moving down to a mid-sized sedan from a larger model, for instance).

Significantly, 87% of new car shoppers said last month that they expected gas prices to rise, compared with 66% in April. And 73% said they plan to change their spending habits if gas prices go much higher.

So rising oil prices may take care of what US politics can’t do, in terms of encouraging a shift to smaller cars.

As the blog points out, it could be a happy coincidence for the auto companies if growing popularity of smaller cars helps them meet new emissions standards. The new scrappage scheme doesn’t look like it will help, as it will also provide rebates for some SUVs.

Related links:

Cash for clunkers scheme put to the test (FT, 15/06/09)
$3 gas is back and car buyers are noticing (LA Times, 12/06/09)
Tough standards are welcomed (FT, 20/05/09)

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