Blogs
Higher Gas Prices Equal Better Car Sales
- 05/01/2012 |
- by Karl Brauer |
- Karl on Cars / Industry Analysis

While high fuel prices are a justifiable factor in terms of reducing car sales, it appears high fuel prices plus an aging consumer automotive fleet is a magical combination for boosting car sales.
At least that’s what all the experts are saying. The last few times fuel prices spiked, including 2005 and 2008, car sales slumped as a response. This time, high gasoline costs are actually juicing sales while thrilling automakers and dealers.
Why? Because those previous fuel-price spikes, plus a generally faltering economy, have led people to keep the same car for over a decade. Statistics say the average car on the road is over 10 years old, which is almost unprecedented. That number is usually closer to 7 years, but people have put off buying a new car for the past five years and are likely driving the oldest car they’ve ever owned.
There’s another factor at play here as well: used cars are more durable than they used to be. They hold up better and often have lengthy warranties to pay for fixing major components. That means a 10-year-old car doesn’t feel like the broken down penalty box it would have felt like if it were built between 1950 and 2000. For example, my wife is still driving a 2004 Chevrolet Malibu and, honestly, it still works just fine...(if you can ignore the paint scratches and upholstery stains that come from raising two kids in it).
Regardless, many car owners have been angling for a new car for several years, but they couldn’t justify the cost in a down economy, especially when their current car was still working perfectly. But throw in rising fuel costs, and the promise of noticeably better fuel efficiency from today’s models, and now those same drivers can tell themselves, “Well, sure, I don’t really need a new car, but if I can cut my fuel costs and do something nice for Mother Earth...well, isn’t is my duty to buy a new car?
As you can probably guess, automakers don’t care how a consumer justifies buying a new car, just as long as they buy.
So let’s give a cheer for something we normally don’t cheer about: higher gas prices!
No comments yet


Follow us