More Evidence for Increasing SUV Sales

$3 a gallon represents a “tipping point” for sales of SUVs compared to hybrids, similar to findings from NACS survey.

January 20, 2015

NEW YORK – As gas prices continue to decline, many are considering what that may mean for the market for alternative fuel vehicles. Last month, NACS released a consumer survey showing that for every 10-cent drop in gas prices, there is a corresponding 1% decrease in the percentage of consumers considering alternative vehicles. While 78% of those surveyed would consider a non-gas powered vehicle if gas were $5 a gallon, only 68% would at $4 and 56% at $3 a gallon.

This week, CNN Money also reports on what they call the “tipping point” when American drivers start shunning small, fuel-efficient cars and return to their big-SUV buying habits. CNN cites research from TrueCar.com, which calculates that SUV sales begin to rise at $3 a gallon, and hybrid sales begin to fall at $2.77 a gallon.

Last year, SUV and crossover sales increased by almost 12% from the previous year and the trend is expected to continue with 2015’s ever-cheaper gas prices.

According to the Oil Price Information Service, about 70,000 stations nationwide are now selling regular gas for under $2 a gallon.  Anecdotally, car dealers told CNN that they’re seeing a noticeable increase in sales of mid-size SUVs, while hybrids and smaller, more fuel-efficient cars sit on the lot longer than they have in recent years.

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