For most of you I don't have to explain this obvious pattern -- but I'll explain it anyway.
Whether we're talking 2008 or 1978, our car-buying patterns, as they relate to fuel prices, have about as much variation as a teen slasher flick.
It goes something like this: Prices shoot up, people freak out, large vehicles and V8 engines are deemed verboten while economy cars and (more recently) hybrids are hotter than unreleased Brangelina wedding photos. Then, prices eventually drop (rarely to their previous levels, but always from their short-term highs), and/or people get used to the new first digit on gas station signs, and car-buying habits return to "normal" (if you can ever call U.S. car-buying habits normal).
Of course, every time this happens people proclaim, "Yeah, well, I'm not getting burned again! I'm buying something with good mileage right now and never looking back!" But long-term market analysis of the past 35 years proves this declaration to be largely false. And the latest shopping data from Edmunds.com users suggests we're already cycling back to our "bad" car-buying habits.
There are a few important differences this time around, so it will be interesting to see how many people fall back into their preference for performance, space and luxury over MPG and earth-friendliness. For instance, the CAFE regulations are coming in the next 12 years, which means carmakers will have to improve mileage one way or another. That might mean smaller cars and/or more emphasis on weight reduction, and it will almost certainly mean a reduction in engine size and performance.
So even if we're willing to buy the same old V8 beast that gets mediocre (at best) mileage, the car makers may not be offering them in a few more years. Actually, that may be the real story here: What kind of long-term product plans are being radically shifted based on a somewhat short-term reaction to fuel prices?
And there's that ongoing "green" issue that has about as much cultural momentum as I've seen in my 38 years. But, as with fuel prices, the green sensitivity seems to ebb-and-flow over the long run. Will it be as cool to be green in another 12-24 months as it is today? We'll see.
Regardless, Edmunds.com users have drifted back to the truck, SUV and crossover research pages in recent weeks, and if gas prices keep dropping it's likely this trend will continue.
So, to restate today's question: Are you still as fixated on small car purchases and/or fuel economy as you were 6-8 weeks ago? Or is your dedication to cutting your fuel costs and/or "being green" fading? And please really think about your mindset before answering.
By syke
on August 12, 2008
06:18 AM
The only way you're going to get the American public into tiny, hyper-economical cars is to either put one hell of a large gun to their collective heads, or, do the easier equivalent - keep raising the price of gas to the point of absolute pain.
Americans don't want small cars, period. Some of it has to do with distances covered, but a lot of it is that we're used to big, comfortable boats. Other than the constant readers of car enthusiast sites and magazines, the average American driver wants comfort, style, size, and if it doesn't drive incredibly well through the twisties, so what? The average American driver doesn't drive well through the twisties, either.
This is going to be a constant progression. The only change will the that, as gasoline inches upwards (on a long term basis), our definition of a big car is going to drift downwards, slowly but surely. They're still going to be big, relatively speaking, but the real era of the big car died in 1976-78, and they've been getting smaller ever since.
By vacagrande
on August 12, 2008
06:25 AM
Disclaimer - I've never considered trading or selling my car for a more fuel-efficient model solely on that basis. The equation doesn't balance no matter how you do the math, short of traveling salesmen or the like.
That said, renting a car that was just fine to drive and I actually enjoyed looking at that also happened to get very high fuel mileage on the interstate did change my outlook slightly when contemplating my next vehicle. No matter what fuel costs then, it's going to be higher than the $2.something that it cost when I purchased my current vehicle. Because of that, fuel efficiency concerns are here to stay. If nothing else maybe a few people have had an "A Christmas Carol"-style awakening to the kind of car they actually need for their family.
By dougtheeng
on August 12, 2008
06:34 AM
"Are you still as fixated on small car purchases and/or fuel economy as you were 6-8 weeks ago? Or is your dedication to cutting your fuel costs and/or "being green" fading?"
Gas prices will never go back down to what they were. This brief drop in gas prices is temporary. As such, I will always consider gas mileage for my choice of vehicle. I could care less about the green trend, but I accept that in some cases (read: hybrids), it comes with the territory.
North American will be much better when we all drive MINIs.
By firstwagon
on August 12, 2008
07:29 AM
It has nothing to do with distance being covered, Canada is bigger then the states and small cars are very popular here (The Civic and the Mazda3 were at the top of sales charts for years).
I think it's the all American attitude of "bigger is better". That way everyone you go, you can show others that you have more then they do.
By chavis10
on August 12, 2008
07:55 AM
I'm still planning to get an off lease CTS- mileage be damned. Won't be much worse than what I'm getting in my Mazda3.
By brett8210
on August 12, 2008
08:03 AM
I have always preferred cars to trucks or SUV's (My wife not withstanding). As long as I was getting over 20 MPG on the highway and high teens in the city I was happy. Then I bought a 4 Cyl. Accord in 2005. That car was great on gas and still had adequate performance for a mid-size car. When I upgraded to a 3 series last year gas was not the primary concern because I wanted the car more than the sum of its parts, but I have been very pleased with its economy.
Over the last year several of my family members have bought cars, and I have counseled them regarding the relative mpg of different models. For instance my brother bought a Saturn Vue because of the financing deal he was able to get despite the fact that it gets relatively terrible mpg. (Same as the Outlook)
This has not changed over the last 6-8 weeks, because I believe we are in for several years of relatively high fuel costs. If not, great. I am not hoping for them, but merely preparing for them.
By blueguydotcom
on August 12, 2008
08:08 AM
It's the culture that's still pushing for big. Look at the horrid cars of the 50s and 60s. Heck even into the fuel crunch of the 70s the majority of cars were crazy large. It wasn't until California-boy Reagan (yes born in Illinois but still CA through and through) signed on the dotted line to up CAFE that we saw manufacturers downsize cars. When we got Clinton we got a president who ignored CAFE and this followed through with Bush. They let the market decide and in the Bigger-is-best-we-eat-too-much-buy-too-big-US-and-A the choice was clear: biggie size it!
Maybe Europeans would buy big cars if their fuel prices were more moderate? Maybe. Maybe not. Given that the people are mostly used to living in smaller conditions they're already well programmed to accept creative packaging as a bonus.
The Fit/Jazz isn't viewed as a step down in europe. It's just a nicely packaged car with great space, fun handling and wonderful economy.
By 1487
on August 12, 2008
08:10 AM
I was never focused on getting a small car and thus nothing has changed. The media has created this myth that people were dumping Excursions for Fits which is nonsense. Small cars have increased in sales but that doesn't mean that everyone driving something larger than a civic has been lining up to buy a subcompact. Even if prices hadnt come down so quickly I think the fall off in SUV sales wasn't going to continue indefinitely. Remember, people were saying SUVs were going to collapse when gas first hit $3 a gal after Katrina and that never happened. Why? People got used to $3 a gallon gas and eventually they will get used to $4. Large SUVs and crossvers may have peaked already but people will still buy them once they accept $3.50-$4 gas as normal as opposed to unusually high.
By blackadder5639
on August 12, 2008
09:09 AM
Well, my next car is going to be bigger: a 2009+ Mazda 6 4-cyl GT. So that hasn't changed. I'm still debating whether to get the V6 or the 4-cyl, but the V6 gets disappointing fuel economy (17/25) and has no manual so I'll probably stick to the 4-cyl.
Karl, today's topic is very similar to one on THE GREEN ADVISER yesterday. Well, this is my take. I strongly believe that the main reason why people rushed for hybrids and smaller cars was not so much because of $4/gallon gas but rather due to the feat that the price would soon reach $6/gallon. The other reasons for the rush have been the bad state of the economy and people simply over-reacting.
With gas prices going as low as $3.60 and the shock at the pump now gone, people aren't scared of $6/gallon and have stopped over-reacting. This is why I believe that truck, SUV and crossover sales are rising again.
But I don't think those large vehicles will sell as well as they used to because I think gas will reach $5/gallon within one or two years and will never go much below $3.5/gallon again. And I'm not sure when the economy will recover from the housing crisis.
From a technological point of view, I'm very excited about all these technologies that are aiming to improve fuel economy (and reduce global warming) significantly and I hope gas stays around $4/gallon for a long time. CAFE alone will not provide enough incentive......market conditions always seem to be more effective.
By carlisimo
on August 12, 2008
09:10 AM
So basically... it still pays to be a full-line manufacturer, and those who overreacted and canceled all their large vehicles to build small ones are going to get burned. Just like they did when gas was cheap and they overreacted and only focused on the large stuff.
By blackadder5639
on August 12, 2008
09:13 AM
"....much because of $4/gallon gas but rather due to the feat that the price would soon reach $6/gallon."
Sorry! I meant to say "fear".
1487, I wouldn't say the media created a myth. Afterall, there were facts and trends to support what they said: that people were dumping larger cars for smaller ones. Rather, I would the media probably exaggerated or overhyped the situation.....given that they get paid to report news that's hardly surprising.
By mirth
on August 12, 2008
09:21 AM
I currently own a V6 mid-size sedan. Even before the gas price run-up, I was considering a compact or an I-4 mid-size for my next car purchase (probably next year). My wife stays home, so I can buy the "commuter" car. I'm leaning towards an 4 cylinder mid-size at the moment.
When the "craze" first started, I admit it did change my driving habits. I used to regularly do between 80-85 MPH on the highway. I brought that down to about 70 MPH and began monitoring my gas mileage closely (something I never did before). But after a couple of fill-ups where I was getting the same MPG's (around 24), I lost interest. My speed has also come up a little - I usually set the cruise around 73-74 MPH.
I think that's a pretty good reflection of what will happen with the market - we'll calm down a little and start buying some lower mileage vehicles again, but we won't go back to where we were.
By iskch
on August 12, 2008
09:56 AM
Karl, if I have the space I will get a car to replace my 4 cyl.Frontier for daily use for the office. I won't get rid off of my truck because I need it when I need to haul stuff.
By deagle13
on August 12, 2008
09:59 AM
"It wasn't until California-boy Reagan (yes born in Illinois but still CA through and through) signed on the dotted line to up CAFE that we saw manufacturers downsize cars."
Actually, President Ford signed the bill that launched the CAFE standards in 1975. Reagan actually relaxed the CAFE standard in 1986 (to 26.0 mpg from 27.5 mpg) and Bush the first re-upped the CAFE standard to 27.5MPG in 1990 and it's been there ever since.
You are correct - CAFE forced the automakers to begin downsizing cars. However, CAFE also facilitated the SUV boom allowing SUV's to be classified as trucks and thus enabling automakers to build as many of them as they could sell (or more than they could sell if you count 2008) without having to build money-losing compact cars to offset their poor mpg. Of course, the utilitarian SUV predecessors that existed in 1975 were little more than pickups with enclosed beds and back seats, so the truck classification is understandable. A classic example of the law of unintended consequences.
By blueguydotcom
on August 12, 2008
10:01 AM
I didn't say Reagan created Cafe. Reagan re-upped CAFe, which was odd given his reputation as a friend to business.
True about SUVs. A loophole that Clinton and Bush were fine with.
By blueguydotcom
on August 12, 2008
10:02 AM
That was bad on the raising of CAFE though. :(
By blueguydotcom
on August 12, 2008
10:03 AM
Where is the edit function? Two posts with errors.
I meant to say - "That was my mistake about Reagan raising CAFE."
I still find it odd that Reagan was willing to re-sign on CAFE yet today so many are wildly opposed to it.
By dw_fit
on August 12, 2008
10:49 AM
Syke said, "Americans don't want small cars."
Having owned everthing from pickup trucks and SUVs to Corvettes and wheelstanding Mustangs, I still prefer small cars. The handling and manueverability of a small car is unbeatable. I've owned a '87 CRX Si and currently drive an '07 Fit Sport. Both were great on gas and fun to drive (i.e. go-carts). A Mini is on my wife's short list (S with a 6-speed manual). We like small, regardless of the price of fuel.
By seppoboy
on August 12, 2008
11:35 AM
I don't pretend to be typical, and won't be changing my vehicle. I have always had a small(er) displacement engine, manual transmission, efficiently packaged car.
I got rid of an early emissions-controlled 1974 Fiat in months because it only got 23 mpg, unlike my 1972 that never dipped below 32. All other cars I've owned have made 25+ mpg, including an Audi 5000 quattro, A4 quattro 2.8, and BMW 328i (28 mpg over 50k miles). My current Jetta TDI is averaging just under 48 mpg for 62k miles.
I have always assumed fuel prices could spike like they have recently, and have been ready for it. Besides, I like efficiency and driving something with more chassis than engine.
Some co-workers have really been floored, long rural commutes in big thirsty trucks for modest pay... those who can afford to, or have to replace a failing vehicle, are downsizing drastically. They are gun shy, and even with recent drop in fuel prices are hurting financially. Nope, they are turning the page.
By billt9
on August 12, 2008
11:49 AM
You anti-hybridite!
One day, hybrid robot cars will take over the world and enslave us.
Better appease them now!
By kurtamaxxxguy
on August 12, 2008
12:57 PM
"Are you still as fixated on small car purchases and/or fuel economy as you were 6-8 weeks ago?"
No immediate change for me, though for long-term I am keeping track of ways to be more fuel-efficient with an AWD vehicle, and possibly (though unlikely) swapping vechiles ahead of usual 6-year cycle if there is advantage.
Mindset here is European efficiency merged with Japanese reliability (makes choice hard). Motown's gettin' to it, but not quite there yet.
By karjunkie
on August 12, 2008
01:18 PM
I for one am happy that higher gas prices have led the automakers to bring into this country quick little hatchbacks like the Fit and Rabbit and make people realize they don't need to buy SUVs to get the same convenience with much better gas mileage. Americans tend to say "supersize me" with that type of vehicle even when they don't need it. On the other hand, neither 5 nor 6 dollar gas would keep me from buying a desirable performance car or pickup truck if that was what I wanted or needed.
By carlisimo
on August 12, 2008
02:31 PM
I'm happy that gas prices are going back down, but I wouldn't mind the occasional spike. Not long enough to bankrupt us, but enough to remind us that things change quickly and betting your house on cheap gas is a bad idea (it affects everyone when people start defaulting, so it's more than just a personal decision).
Me personally... now that I take public transit to work and only drive for fun, I don't really care about fuel efficiency!
By firstwagon
on August 12, 2008
05:52 PM
IMHO small cars are better then large cars, high gas prices or not.
I would buy a Civic over an Accord and a Fit over a Civic. I would buy a Mini over a BMW and a Mazda5 over an Odyssey. A Miata over a Vette and a Tacoma over a Tundra, etc, etc.
Basically small cars can do what big ones can and a whole lot more.
I have no need to impress the neighbours and even though I'm 6,2 and 195 lbs, it's been a long time since I rode in a car that was to small.
Hauling around excess weight is dumb, doesn't matter if it's on your gut or your car.
By 1487
on August 13, 2008
06:03 AM
"Hauling around excess weight is dumb, doesn't matter if it's on your gut or your car."
assuming that every driver can get by with a compact is dumb. People have kids and for many families a compact car isnt sufficient for anything but commuting to work. I cannot fit all the crap I need when I go on a road trip in a civic.
By firstwagon
on August 13, 2008
07:34 AM
An Accord doesn't seat anymore people then a Civic and only holds a little more cargo. Assuming you need a bigger car is dumb too.
(Just using Honda as an example, the same is true of any make)
By karjunkie
on August 13, 2008
12:02 PM
To add to Firstwagon's point, most people with a family could easily get by with the convenience of a small hatchback like the Fit or the Rabbit. There is this delusion that they have to have an SUV. Hopefully, the gas crunch will convince many of them that they can save money with a smaller hatchback and have all the conveniences they need for their family
By blueguydotcom
on August 13, 2008
02:06 PM
Karjunkie, everybody keeps telling us we need to get behemoth SUV when our kid is born. I think it depends on the person/family. My sister, her husband and 5 year old packed 11 bags for a 2 week cruise. 11 bags. My wife and I flew to Thailand for 2 weeks and we got by fine with 3 bags and one had Scuba equipment.
Some people need lots of things. Some of us travel as light and small as possible. Baby to us = carseat, stroller (frame, not a giant travel system), bag with clothes/diapers/food. My sister and many friends have the jumbo travel systems and bring along all kinds of stuff for their kids. To each his own...they don't need it but they want it.
By proxl
on August 13, 2008
04:51 PM
Not going to be the most popular comment on this car-geek site, but -- if Congress and the president ever want to reduce this nation's dependence on foreign oil (and quit funding the terror states who supply it), the only sensible policy is to put a price floor on gasoline -- say $4.50 in 2008 dollars -- and make up for the difference by tacking on taxes whenever oil market prices fall beneath that mark. And then use the taxes to fund alternative fuels research, transit, etc. That's how Europe and Japan do it, and it's the only thing that makes sense here.
By mnorm1
on August 13, 2008
06:52 PM
"...use the taxes to fund alternative fuels research, transit, etc. That's how Europe and Japan do it..."
What alternative fuels have Europe and Japan developed?
By firstwagon
on August 13, 2008
08:08 PM
They do have great transit systems though.... Something the US can't say (exempt New York).
By blueguydotcom
on August 13, 2008
09:45 PM
mnorm, Germany is the leading manufacturer and buyer of solar.
By mnorm1
on August 14, 2008
10:32 AM
Agree about the transit systems.
I didn't know Germany was a leader in solar. I will try to read up on it this weekend.
Do they (Europe and Japan) use fuel taxes to fund alternative fuel research? I had not heard that before. I thought it was for transit systems and the "general" fund.
By mnorm1
on August 16, 2008
12:18 PM
Gemany is a leader of solar energy. Several articles stated this. Germany produces about half of the worlds solar generated electricity.
However; In 2006 German solar electric capacity was 400 mega watts.
Last year less than 0.5% of electricity in Germany was from solar, this may reach 3% by 2020. This from an article in the Washington Post.
Texas is not noted for being "green", but it had 4,296 mega watt capacity for wind generated electricity in 2007, about 25% of total US.
By myob
on August 18, 2008
11:36 PM
Hybrids = faddish cars for trendy attention whores
Prices will rise each summer and fall at its end every year, with the average resetting a good bit higher each year. We're that close to the limit in the supply/demand equation.
But minds will adjust. Just as today "$3.59/gal" gets peeople excited...except for the opposite reason it did 3 years ago. Back then $3.59 was terrible. Today it's time to consider that new Tahoe again!
The market has worked. We have become more efficient and will continue to be. Media types (cough) have made it a little more than it really was. But that's what you're paid for.
"gas prices up....no big deal for most drivers" isn't a great headline.
By 1487
on August 19, 2008
05:40 AM
The US has great transit systems in its major cities. Smaller cities and suburban areas lack decent transit. NYC, DC, Chicago, Philly, Boston, etc. have very efficient transit systems. NYC and DC have the most expansive subways however.