MAY 2010
                                        

Fuel efficiency and concern for the environment impact consumer decisions

A new survey by Capital One Auto Finance found that when it comes to Americans’ auto preferences, bigger may not always be better and fuel efficiency is in the driver’s seat. The survey, which examined drivers’ views about fuel efficiency and alternative motor vehicles, found that 53 percent of respondents said that their next car will be more fuel efficient than their current vehicle and 55 percent would be very likely or somewhat likely to give up a larger vehicle for a more fuel efficient model.

The study also explored alternative motor vehicles, or vehicles that run on a fuel other than “traditional” petroleum, such as electric vehicles or gas-electric hybrids. While the overwhelming majority of those surveyed do not currently own an alternative motor vehicle and 76 percent have never driven or test-driven one of these types of cars, nearly 80 percent believe they are not just a passing fad.

Alternative motor vehicles – fad or future?

Just over one-third of the respondents said it is somewhat or very likely that their next car purchase will be an alternative motor vehicle and most drivers surveyed think they will own an alternative motor vehicle in their lifetime. Forty-two percent of survey respondents predict that in ten years, 25-50 percent of cars on the road will be gas-alternative models, while nearly 23 percent believe that over 50 percent of cars on the road will be alternative cars by the year 2020. In the near term, however, consumers say that pricing is the primary factor holding them back from purchasing an alternative motor vehicle.

Understanding new technologies and pricing

With new technologies emerging, the study also found that consumers may not be doing enough research on alternative vehicles and may be unaware of valuable tools to consider when purchasing a new car. The United States government is currently offering a tax rebate for the purchase of some alternative motor vehicles, yet 41 percent of consumers surveyed did not know about this rebate program. Of those who said they were likely to purchase an alternative motor vehicle, nearly three-quarters have not calculated the savings in gas over a traditional vehicle.

Helping consumers navigate the car buying process

Employ the following tips to help drivers manage the car-buying process:

  • Research different models. It’s important for car buyers to do their homework and learn more about the features of different models, especially if considering an alternative motor vehicle. For those who would like to save money on gas and are considering trading in a gas guzzler for a more fuel efficient car, Edmunds.com offers a calculator that shows how long will it take before you pay off the balance of a vehicle purchase and begin saving money. Visit www.edmunds.com/calculators/gas-guzzler.html
  • Learn about vehicle pricing. Research new and used car prices online. Know what you can afford and use those target numbers as a reference point for your pricing information.
  • Research and compare different financing options. There is a range of auto financing options available, including dealer financing, loans from banks and credit unions, and pre-approved no-obligation online loans.
  • Make sure you are comfortable with the contract. If it’s not the price or deal you want, be ready to walk away.