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The Kelley Blue Book seems to track nearly everything related to cars and transportation. We recently became aware that a new KBB survey indicated that consumers are changing their car-buying habits because of high fuel prices. Not every purchaser is choosing as efficient a vehicle as they could, to be sure. According to KBB’s latest survey, new car buyers are spending less on non-essential activities, like going to the movies, eating out and even purchasing new homes, all because of those same high gas prices. This data seems to indicate that it’s not just the automotive industry feeling the pain — the entire economy is at the mercy of petroleum.

Only twenty-two percent of respondents indicate that high gas prices are not affecting their spending habits at all. One bit of good news is that carpooling and other alternative transportation methods are on the rise, which should result in some reduction of vehicle emissions. Still, the five-percent increase cited since October of last year indicates that the public still has a long way to go before carpooling or mass-transit becomes a serious option in our collective minds.

Press Release:

Kelley Blue Book Marketing Research Shows New-Car Shoppers Cutting Back on Other Discretionary Purchases

IRVINE, Calif., April 24 According to the latest Kelley Blue Book Marketing Research study (http://www.kbb.com), the number of new-car shoppers adjusting their spending habits due to increasing gas prices has reached a record high. The April 2008 results revealed that 65 percent of shoppers are spending less on non-essential retail items as a result of high gas prices, compared to 42 percent just six months ago in October 2007. Additionally, 53 percent indicated they eat out less often, 48 percent purchase fewer media entertainment items, 15 percent carpool or find alternative means of transportation and 10 percent have delayed purchasing a new home. Furthermore, the portion of shoppers who say they will not change their spending habits due to gas prices has decreased from 43 percent in October 2007 to 22 percent in April 2008.

Kelley Blue Book Marketing Research
Gas Prices and Shopping Habits - Trending Over Time*

Purchase/Shopping Habits Oct Dec Jan Feb Mar Apr Change from Oct

Eat out less often 38% 41% 41% 44% 51% 53% +15
Carpool or find alternative
means of transportation 10% 11% 11% 10% 12% 15% +5
Delay purchase of new home 5% 11% 8% 9% 10% 10% +5
Less shopping of
non-essential retail items 42% 46% 50% 50% 61% 65% +23
Purchase fewer media
entertainment items 33% 36% 34% 40% 45% 48% +15
Will not change any
spending habits 43% 36% 35% 34% 25% 22% -21

* November 2007 data not available

Many contributing economic factors have been detrimental to consumers and their shopping and purchase decisions in the last few months. During the third week of April, the price of oil jumped to nearly $120 a barrel and forecasts have speculated gas will cost an average of $4 per gallon in some parts of the country during the coming summer months. With this in mind, consumers are considering more fuel-efficient vehicles. The April 2008 Kelley Blue Book Marketing Research study showed that 47 percent of new-car shoppers would seriously consider a more fuel-efficient vehicle if gas prices increase another $0.25 or less, compared to 26 percent in October 2007.

“The effect gas prices have on consumer spending and shopping behaviors indicate how important fuel costs are to the economy,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue
Book and kbb.com. “Gas prices are already affecting vehicle sales in every segment, and traditional sport utility vehicles have been especially hard hit. Other industries will feel the pinch as consumers cut out life’s little luxuries like clothes, eating out and entertainment just so they can pay the fuel bills.”

The latest Kelley Blue Book Marketing Research study was conducted on Kelley Blue Book’s kbb.com among 2,020 in-market new-vehicle shoppers during April 2008.

[Source: Kelley Blue Book]

A win is a win, right? We’re content to consider the fact that two-thirds of new car buyers in the U.K. are considering going green for their next car purchase a good thing, despite the fact that most of them are doing so to save money, not the environment. What Car? group editor Steve Fowler says that “with the cost of living increasing and with wages failing to keep up, car buyers are saying financial pressures are of more concern than helping the environment.” If this is the case, it seems that new graduated road taxes in the U.K. may have the desired effect of forcing consumers to purchase low-emitters. Follow past the break for the entire press release.

Press Release:

66% of car buyers will go green (but most will do it to save cash)

A What Car? survey reveals today that two-thirds of prospective new car purchasers will be looking to buy a greener vehicle in the next 12 months.

However, 47% of purchasers say they will be buying a greener car for financial reasons, while only 19% say environmental issues are the main factors for their next car.

Steve Fowler, What Car? group editor, said: “The Government will be pleased with this news coming so soon after Alistair Darling’s Budget. However, with the cost of living increasing and with wages failing to keep up, car buyers are saying financial pressures are of more concern than helping the environment.”

Last month, Chancellor Alistair Darling announced a raft of measures in his first Budget designed to encourage motorists to buy more environmentally friendly cars. These measures included new Vehicle Excise Duty (road tax) bands that will come into force in 2009, which will make buyers of more polluting cars pay more in road tax.

Plus, in 2010, the Government will introduce a so-called ‘Showroom Tax’ where buyers of the most polluting cars will pay a new, higher rate of tax in the first year ownership, while new cars with carbon dioxide emissions of less than 130g/km will not pay any road tax in the first year.

“Even if you aren’t planning to buy a new car soon, motorists can still do their bit for their environment by following the What Car? guide to ‘Greener Driving’,” said Fowler.

1. Driving at 60mph uses up to 9% less fuel than at 70mph and, on more advanced vehicles, motorists can take advantage of cruise control – a steady speed is also more fuel efficient.
2. Keep weight down – ensure your car is as free of clutter as possible, and remove roof and bicycle racks when not in use.
3. Plan your journey and use a satellite-navigation system or on-line routing site before you set off. Getting lost or stuck in traffic pumps additional CO2 into the atmosphere.
4. Travel outside of rush hour to avoid congestion.
5. Try not to use all of your car gadgets at once – they all use energy and contribute to your vehicle’s CO2 output.
6. Be a better driver and read the road ahead – hang back from the traffic in front so you don’t have to brake and accelerate every time it slows down and speeds up.
7. Turn engines off when stuck in traffic or when waiting for passengers to arrive.
8. Consider offsetting your emissions – look at websites such as www.climatecare.org that can help calculate your CO2 output.
9. Look at car sharing, set up a system at your place of work or start a car-sharing school-run.

What Car? will be announcing the winners of their first Green Awards at the British International Motor Show on the 22rd July 2008 at ExCeL London.

What Car? will also be showcasing the latest environmental cars and technology in the Greener Driving Pavilion, where consumers can get hands-on with some of the latest green innovations available now and see what’s coming in the future.
[Source: What Car?]

Brazilian president Luis Inazio Lula da Silva is eager to shoot down anyone who says ethanol raises the price of food. There are plenty of people with their own ideas about that. But what about the impact ethanol has on oil prices? If we believe the Renewable Fuels Association, then ethanol plays a solid role in keeping oil prices about 15 percent lower than they might otherwise be (so, around $130+ per barrel if ethanol weren’t in the picture). The reason for this is because burning ethanol reduces the world’s demand for oil, and decreased demand lowers prices. The 15 percent figure comes from Merrill Lynch analyst Francisco Blanch, who spoke to the Wall Street Journal. While that may sound good at first blush, the reporter on the WSJ piece, Patrick Barta, begins his article this way: “The world’s economy is acquiring a new energy addiction: biofuels.” Anyone else hear warning bells?
[Source: Domestic Fuel / WSJ]