Current Gas Price Hikes Don't Measure up to Recent History, Says Edmunds.com
SANTA MONICA, Calif. — February 23, 2011 — The biggest one-day gain for oil prices in more than two years yesterday may focus more of America's attention on rising fuel costs, but the price increases at the pump are not yet as dramatic as other jumps in the last few years, according to an economic analysis by Edmunds.com.
Since September 2010, average monthly gas prices have risen 45 cents to $3.21 (February month-to-date), an increase of 16.4%. But during the past four years, there have been several periods where gas prices increased by even more substantial amounts. In 2008, gas prices rose 94 cents — or 33.4% — to $4.11 between February 2008 and June 2008. Gas prices also increased 63 cents from February to May 2006, 86 cents from February to May 2007, and 94 cents from December 2008 to June 2009.
"Between yesterday's surge in oil prices and the recent unrest in the Middle East and North Africa, the media might stir itself into a frenzy, but past experience suggests consumer buying behavior won't change quite yet," said Lacey Plache, chief economist at Edmunds.com. "When gas prices rise substantially and suddenly like they did in 2008, consumers are more likely to run out and replace their gas-guzzling cars. But more gradual increases in gas prices like what we're seeing now do not tend to have as strong an effect on overall auto sales."
Instead of driving consumers to the sales showroom, said Plache, the current pace of gas price increases is more likely to curb gasoline consumption habits through changes to driving behavior. In anticipation of growing costs at the pump, Edmunds.com offers several useful suggestions for drivers to save money with "Survival Strategies for Steeper Gas Prices." Some of the tips include:
- Track the mileage you get in the cars you drive now. This can help you measure the impact made by any changes to your driving habits.
- Assess what rising gas prices mean to your family. The impact may not be as dire as you think.
- Switch to "calm driving" methods. Compared to a fast, lane-changing, sharp-braking style, Edmunds.com found that "calm driving" improved fuel economy by as much as 35 percent.
- Stay away from "gas-saving" products. Such products rarely — if ever — work.
Fuel Efficient is not Necessarily Cost Efficient
For consumers already in the market for a new car, higher gas prices do not necessarily mean they need to make a dramatic change in the cars they prefer to drive in order to save money. In particular, Edmunds.com cautions that buying a new — and possibly more expensive — hybrid may not be more cost effective.
"With incentives at their current levels, it is possible that any pinch felt by increases in gas prices could be counter-balanced by lower payments or by improved fuel economy in any new car," said Plache. "So, even in an environment of high fuel prices, it could still make more sense to go after a new Camry instead of a new Prius."
Edmunds.com's gas-guzzler calculator is an excellent resource for car owners considering the financial benefits of switching to hybrids or other gas-sipping cars. Edmunds.com's Data Center also offers the estimated Monthly Fuel Costs (MFC) for every 2010 and 2011 model year vehicle based on 1,250 miles driven per month based on updated national fuel costs.
For consumers looking to make the switch to more fuel-efficient cars, Edmunds.com offers several tips and resources for making the change:
- Check out Edmunds.com's Top 10 Most Fuel-Efficient Non-Hybrids for 2010, Top 10 Most Fuel-Efficient Hatchbacks and Wagons of 2010, Top 10 Most Fuel-Efficient Trucks of 2010, Top 10 Most Fuel-Efficient SUVs and Crossovers of 2010 and Top 10 Most Fuel-Efficient Sedans of 2010. Many of the vehicles are available as 2011 models with equal or even slightly better fuel efficiency
- Zero in on the best deals. Edmunds' Green Car Advisor features the best cash back and low-APR deals for hybrids.
- Consider well-equipped smaller cars that generally offer better fuel mileage. A "downsize" doesn't necessarily have to mean a "downgrade."
For more details on surviving steeper prices at the gas pump, visit Edmunds.com at http://www.edmunds.com/fuel-economy/survival-strategies-for-steeper-gas-prices.html. You can also find the Monthly Fuel Cost (MFC) for your vehicle at http://www.autoobserver.com/car-data-center/edmundscom-leaderboard/monthly-fuel-cost-mfc/.
About Edmunds.com, Inc. (http://www.edmunds.com/help/about/index.html)
Edmunds.com Inc. publishes Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site and hosts the most established automotive community online. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.