Analysts say that with the increase in gasoline prices comes a drop in SUV sales and trade-in values at dealerships. The U.S. Department of Energy said that during the past week, U.S. gasoline prices topped $3 a gallon -- the highest level since October 2008.
On the New York Mercantile Exchange last Monday, crude oil reached $91 a barrel, resulting to the increase of nationwide pump prices to 7 cents a gallon to an average of $3.05.
That is up nearly 45 cents from a year ago. Diesel prices have also increased, hitting $3.29 a gallon, over 56 cents a gallon higher than the prior year.
According to Alec Gutierrez, lead analyst for vehicle evaluation at Kelley Blue Book, SUV sales have decreased about 1% since the last major gasoline price hike in spring of 2008. He doesn’t believe that SUV sales will decrease significantly unless prices reach $3.50 to $4 per gallon.
But he said that even then, the rush to offload larger vehicles will not be as evident as in the spring of 2008. He said that if there’s a 20-to-30% increase per gallon within two weeks “then of course people are going to panic,” but if the increase happens steadily in a longer period of time then the market is given the chance to “react rationally.”
However, even when consumers are able to know what to expect, it’s possible that they will still not change their purchasing habits. [via autonews - sub. required]