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 »  Articles  »  Auto Loan  »  Auto Buying
Auto Buying
By Credit Federal | Published 05/5/2006 | Auto Loan |
Auto Buying - Fuel Economy or Loan Incentives?

Thus far, despite high gas prices U.S. consumers have not been aggressive in seeking more fuel-efficient cars and trucks.

Chief economist Paul Taylor of the National Automobile Dealers Association, believes that as gas prices continue to rise, it could change consumers' auto buying behaviors.

Over a nearly two year period, a 30% increase in gasoline prices resulted in a 5% increase in customers choosing a four-cylinder engine over a six-cylinder, he said.

Also, sales of crossover SUVs are increasing as sales of traditional truck-based SUVs decline. Taylor said eight-cylinder demand has stayed constant in recent years for a variety of reasons, including strong demand in pickup trucks. Many buyers of pickup trucks need a larger engine for business purposes and therefore buy relatively large diesel engines to take advantage of fuel efficiency, durability and increased towing power. Automakers and dealers say they are increasingly aware of consumer anxiety over fuel economy, even if those fears have yet to spur major changes in customer buying habits. But experts say the cost of gas will have to go higher than $3 per gallon -- and stay there -- to bring on a major change in the type of vehicles Americans purchase. "The difference now is it's on everybody's mind," said Jerry Reynolds, a Ford dealer in Garland, Texas. "Everyone buying a car is trying to improve their fuel economy."

But watch out... All three of the big auto makers will soon roll-out special incentive auto loans, including 0% financing, particularly for gas-guzzling models. The hope is that it will outweigh consumers' concerns about fuel-efficiency.

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