Have you noticed anything different lately as you drive in your city or on the highway? Big vehicles are back. We’re seeing more pickup trucks and SUVs on the road these days, and Hummers have even made a reappearance. The main reason? Gas prices. I don’t know if you’ve noticed, but they are at their lowest point since 2010.
According to GasBuddy.com, as of Monday, November 17th, 2014, the price of gas ranged from $3.94 in Hawaii to around $2.67 in Texas, and $2.61 in South Carolina. Keep in mind that those numbers don’t even account for the locally-owned gas stations that compete for business and often are 15-20 cents lower than the state average. Locally for me in the Dallas-Fort Worth area, it ranges anywhere from $2.43 to $2.60.
What do falling gas prices mean for car dealerships? The big boys are back in town!
Over the last month, auto analysts say that consumers have shown a fresh interest in the kind of SUVs — Hummers, Lincoln Navigators, Ford Explorers — that typified America’s bigger-is-better mindset of twenty years ago. The new mindset among some car buyers is one of the most unexpected consequences of a domestic oil boom that has helped global crude prices plummet in recent months, with the cost of a gallon of gas now below $3.
As oil prices hit a three-year low, Americans are starting to see price changes that could ultimately influence everything from their grocery shopping to their heating bills to their travel. The lower prices have the potential to nudge the U.S. further away from its dreary post-recession mindset, leaving instead a nation with more affordable air and road transportation options, higher consumer confidence, and yes, a few more gas-guzzlers driving around.
I checked with local auto dealerships in the Dallas-Fort Worth Metroplex, and the results were almost identical among them. To a man, each place I contacted told me that truck sales, SUV sales, and “bigger” vehicle sales were up about 15%.
Most pickup trucks will get 18-23mpg on the road and 13-18mpg in the city, while Hummers will usually get 10 gallons to the mile. (Did ‘ya catch that one? I kid. They run about 10mpg.)
That is the definition of a gas guzzler. When gas prices soared several years ago, it darn near killed off the Hummer. Luckily for GM, the interest is back! Toyota, Ford, and GM are all reporting a surge in customer interest in their larger vehicles.
So, as you drive around the next few days, look around to see how many “bigger” vehicles are on the road. It may surprise you, and leave you … humming along. (Sorry, I couldn’t resist.)
Let me hear from you: Have you recently made a purchase that was at least in part influenced by the drop in gas prices? Hit me up on Twitter with your experience!
Ronnie Garcia is the Voice of Reason at The Scoop. He is also an avid guitarist, educator, and all around smarmy guy. You can follow him on twitter @CapnDD.