Gas prices have been steadily falling for the last few months, hitting an average price of $2.68 as of December 15th. Even better news? Analysts think it might hit lows of $30 a barrel, due in part to new sources of US based oil (like the fracking boom in North Dakota) and a surplus supply in foreign countries due to decreased demand in places like China.
Americans have started taking advantage of those price drops, but not by increasing their amount of car travel. According to dealer reports, the sale of large SUVs and trucks has seen a big boost in the last few months. In fact, light duty truck sales (like the Ford F-150) are up 9.6% this year. Compare that to a paltry 1.3% increase in sales for sedans and other smaller cars, and you can see how much the shift in oil prices have affected consumer’s purchasing decisions.
What does all of this mean? As the price of driving larger cars decreases, consumers are upgrading their vehicles. The problem with this is that while the cost of car note or lease will stay the same for the next 3-5 years, the price of oil likely won’t. Oil prices fluctuate largely, and while the price at the pump right now is great, it may not be so great a year or two from now.
How can you take advantage of the lower cost of oil, without putting yourself in a potential bind in the future? If you need a new car, look for cars that have great gas mileage, without sacrificing too much extra space. Crossover vehicles are a great example. They generally get much better gas mileage than full blown SUVs, and are larger than the standard sedan.
Are you thinking about buying a larger vehicle because of cheaper gas prices? What types of cars or trucks are you looking at?