Commentary
Better Mileage, Good Financing Leads to More Car Sales
- by Jack Loechner , Staff Writer @mp_research, April 4, 2005
According to the latest BIGresearch survey, consumers look at gas prices and 30-year conventional mortgage rates and conclude refinance and buy a new car.
Slightly less than half of all respondents say higher gas prices are having no major impact on their spending outlook. Despite higher bank-to-bank borrowing rates, and higher gas prices, the current monetary and credit system is relatively unaffected by the recent upward move in oil and gas prices.
Richard Hastings of The RDH Company and a BIGresearch Associate, says "Domestic gas inflation leads to renewed efforts to maintain U.S. dollar-Yuan peg rate in order to prevent imported discretionary goods prices from rising. This makes today's gas inflation almost meaningless to domestic monetary policy. It does, however, …encourage policy makers to focus on price stability which, in today's macroeconomic language equals imports and deficits."
How Fluctuating Gas Prices Impact Consumer Spending (multiple selection ok) | |
Delayed major purchase such as car, TV, furniture | 14.4% |
Reduced dining out | 24.7% |
Decreased vacation/travel | 28.4% |
Increased carpooling | 4.6% |
Spending less on groceries | 14.6% |
Spending less on clothing | 21.0% |
Other | 7.5% |
No major impact | 48.7% |
Source: BIGresearch | |
Consumers continue to use higher gas prices, and allegedly inadequate mileage, to justify more expenditures on new vehicles. Consumers are saying they are going to borrow again long-term (maybe 72-month auto loans) in anticipation of much higher gas prices.
Motivation To Purchase A New Vehicle (multiple selection ok) | |
Financing deals/incentives were too good to pass up | 14.3% |
Lease was up | 4.8% |
Old car had high mileage | 35.2% |
Old car was always in the repair shop | 20.4% |
Tired of old car; I wanted something new | 22.0% |
Wanted a vehicle with new "tech toys" (GPS, DVD, etc.) | 6.2% |
Wanted a vehicle with better gas mileage | 19.2% |
Wanted a vehicle with better safety features | 14.6% |
Like the style of the new models | 15.0% |
My significant other wanted a new car | 11.9% |
Needed another car for my family | 14.0% |
Old car "died" | 17.6% |
Needed more room | 9.0% |
Other | 17.0% |
Source: BIGresearch | |
The sum of the % totals may be greater than 100% because the respondents can select more than one answer.
You can find out more here.
Jack Loechner is the Editor of The Center for Media Research's daily Research Brief. You can reach him at jack@mediapost.com.