VehicleVoice Fuel Price Impact Survey – April 2006
The Fuel Price Impact Survey conducted monthly by AutoPacific‘s VehicleVoice indicates that the median fuel price paid by U.S. motorists increased from a September 2005 peak of $2.90 per gallon to a new peak of $2.94 a gallon in April 2006. This was up from $2.42 in March. April’s spike is the largest month-over-month spike since September 2005.
SUV Loyalty Deteriorates – Small Cars Set to Boom?
In September respondents reacted to the price shock with about 27% of SUV owners saying they would consider buying another type vehicle when they replaced their SUV. As fuel prices moderated in the months following September, loyalty to SUVs rebounded. By March, only 13% would consider shifting away from SUVs. But, given the new April peak, about 25% of SUV owners say they may buy something different next time. Similarly, interest in Small Cars, up 41% in September, and up only 17% in February, was up 40% in April. Clearly, there is a direct relationship between fuel prices and the type of vehicle a person wants to drive.
About 25% Have Not Changed Driving Habits
As fuel prices increase changes in driving habits would be expected. About 25% of the respondents indicate that they have made no changes in their driving habits. About 58% say they are combining trips and 37% are driving slower. An almost free way to increase fuel economy is to increase pressure in the tires, but only 17% are doing this (up from 11% in September).
More Stringent CAFÉ Unnecessary
The Bush Administration and Congress appear poised to propose increased CAFÉ (Corporate Average Fuel Economy Standards) over the next few months. Based on the results of this VehicleVoice research, it appears that, over time, market forces would work admirably to shift American drivers to a more fuel-efficient vehicle fleet. If fuel prices remain high enough long enough, drivers will shift to a more fuel efficient car or truck on their own without undue and disruptive government intervention. Since these “adjustments” in CAFÉ could not be implemented for years, the immediate outcome would primarily be political and not economic.