What gas spike? Americans still hungry for SUVs, pickups
Rising gas prices did not keep Americans from buying large pickups and SUVs in February, according to sales results from leading automakers.
Industrywide U.S. auto sales shot up 27 percent compared to a year ago, according to sales tracker Autodata. That's well above forecasts of about a 19 percent increase. The sales rate was the best since the Cash for Clunkers program, and at that pace, sales could reach 13.4 million vehicles over a full year.
The month was particularly strong for the sale of light trucks, such as pickups, vans and SUVs, even in the face of higher gas prices. Truck sales rose 32 percent and had the best sales rate since before the financial meltdown.
"We're seeing consumer demand coming back stronger than we anticipated, along with loans and leases becoming easier to get," said Jesse Toprak, analyst with TrueCar.com. Toprak said the two types of vehicles getting the most attention from buyers are small cars and full-size trucks, demonstrating that while fuel economy is becoming more important, there's still a lot of pent-up demand for larger vehicles.
The increase in gas prices isn't making the impact on buyers it did even a few years ago, said Paul Ballew, chief economist for Nationwide Financial.
"Keep in mind, we reset our expectations. Five years ago, $3 a gallon was 'Oh my goodness.' Now it's more of a norm," he said.
The real benchmark is more like $4 a gallon, according to Sergio Stiberman, CEO of LeaseTrader.com. He pointed to a survey of those turning in leased trucks, which showed only 16 percent did so because of high gas prices in February, compared to 78 percent in summer 2008, when gas hit a record $4 a gallon.
"During the uptick, concerns and complaints heat up when we pass certain price benchmarks, but widespread behavior doesn't actually change until we reach $4 per gallon," he said.
AAA's estimate for the average price of a gallon of regular gas stands at $3.375, up 9 percent in the last month. The price hikes are accelerating as unrest in the Middle East raises crude oil prices, causing a 6 percent rise in just the last week.
"There's a lot of speculation about what fuel prices will do for pickups, but these people are buying for needs," said Don Johnson, GM's vice president, U.S. Sales Operations. "I don't see that slowing."
"Nobody knows what will happen with fuel prices for sure, other than the fact that there will be volatility," he said
This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com