Perhaps dealership managers won’t have to send lot porters to move those fuel-sippers to the front line for those Memorial Day weekend sales festivities just yet.
It’s true potential buyers likely will be paying a little more for fuel just to get to your dealership.
AAA reported this week that gas prices jumped 12 cents during the past 14 days and 6 cents since last Monday. AAA also indicated the movement pushed the national average to $2.93 — the highest price point going into the Memorial Day weekend since 2014.
But quick online poll orchestrated by Kelley Blue Book gave some indication that those additional costs might not overly influence buyers who could be buying as dealerships ramp up sales campaigns this Memorial Day weekend.
A majority of new-vehicle buyers — 60 percent to be exact — report that recent spikes in gas prices have not played a role in the new vehicle they are considering, according to the KBB.com poll.
As expected, Kelley Blue Book pointed out that survey participants who indicated higher prices have impacted the type of vehicle they are considering are now likely looking at smaller, less expensive, more efficient transportation.
While KBB didn’t have specifics about where survey participants resided, AAA did have concrete location information about where costs at the pump are increasing the fastest.
AAA reported that 14 states tout an average price at the pump of $3 or more. Outside of the typical West Coast states that often pay most for fuel, along with Idaho and Utah, AAA noted this count includes six Northeast and Midwest states, including Connecticut, Pennsylvania, New York, Washington, D.C., Illinois and Michigan.
In addition, AAA pointed out that Arizona, New Jersey, and Rhode Island are all within 4 cents of hitting the $3 mark.
“Compared to an average of the last three Memorial Day weekends, pump prices are nearly 50 cents more expensive and climbing,” AAA spokesperson Jeanette Casselano said in a news release. “Trends are indicating that this summer is likely to bring the national average to at least $3 per gallon.”
The KBB.com survey found that the “reasonable” price for a gallon of gas is $2.50, according to respondents.
Kelley Blue Book added that respondents indicated $4 per gallon is the tipping point, where fuel costs would greatly affect the type of vehicle a person will purchase.
Autotrader executive analyst Michelle Krebs offered additional perspective to Auto Remarketing on Wednesday afternoon, reflecting back a decade ago when gas prices surged and large, not-so-efficient vehicles became as appealing as the stale pastry inadvertently left behind after the last dealership sales meeting.
“As our survey showed, consumer fears about gas prices are not effecting consumer decisions yet,” Krebs said. “I think that could change if prices continue to go higher and for a sustained period of time.
“Dealerships now have a full range of vehicles,” she continued. “There are certainly small and midsized cars out there that get great fuel economy. But you’re not seeing consumers move away from sport utility vehicles. They really like them for the practicality and versatility. There isn’t the fuel-economy penalty that there used to be say 10 years ago when we had a gas-price spike. … The fleet 10 years ago was vastly different.”