By: Erin McKenna
Posted In: News
Photo credit: Erin McKenna
Salve graduate Greg Rosenthal was commuting from Newport to Marlboro, Mass.
Photo credit: Erin McKenna
Bill Schmidt of Saccucci Honda in Middletown says customers are raising the issue of gas prices more often before they buy.
When Greg Rosenthal graduated from Salve Regina University two years ago, he was eager to find a job. He was able to find one at Fidelity Investments in Marlboro, Mass. However, when he and his friends decided to move back to Newport, R.I.the summer after he graduated, he realized his commute, and the cost of gas, would take its toll. “I was willing to sacrifice some extra time with the commute so I could spend the time with my friends,” he said.
When he started commuting to Marlboro, gas was about $2.15 a gallon. He would have to fill his 13-gallon gas tank about every other day. Although it was a little bit of a strain, it was a sacrifice he was willing to make. But when gas prices rose at the beginning of summer, and especially after Hurricane Katrina hit the Gulf Coast, he knew something had to change. He began to look for a new job and was lucky enough to find one a little bit closer, in Middleboro, Mass. Now, Rosenthal only has to fill his tank twice a week. Rosenthal is not alone, however. According to USA Today, Americans are driving less due to the increase of gas prices. In addition, the newspaper cites a study by Power Information Network, a unit of J.D. Power and Associates, that showed that the sales of small, fuel-efficient cars rose in September from 14 percent to 15.7 percent of new car sales. Even more interesting, Power Information Network notes that more vehicles of every type were traded in for smaller cars last month than a year ago. The rise in gas prices isn’t worrying Bill Schmidt, an Internet sales consultant at Saccucci Honda in Middletown, R.I. He said that customers are bringing up the gas price issue more than they did before, but it’s not really deterring them from buying larger vehicles. “Honda SUVs here, from what we’ve seen, have been selling better than passenger cars,” he said. The sales of Saccucci Honda’s two passenger cars, the Accord and Civic, have stayed pretty consistent, whereas the sales of some of the larger vehicles, such as the Odyssey and Pilot, have grown a little bit. When the gas prices rose, the Middletown dealership also increased the sales of its Hybrid models, which it offers as both Accords and Civics. “The Civic Hybrids were gone right away,” he said. “When the gas prices went up, they were gone. We sold them for full sticker price.” The dealership is still sold out of the hybrids, which cost an extra $2,000 to $3,000, and is due to have three more in about a month, two of which have already been sold. Schmidt has also noticed an increase in the number of trade-ins of large SUVs, including Navigators, Escalades and Suburbans. But with the threat of a harsh winter approaching, he said that people want SUVs. “There will always be a market for those,” said Schmidt. Ken Millett worked at GM for 34 years before retiring in 1998. Now, he works as a product trainer for GM dealerships in the Northeast. He says fuel economy can be an issue for some consumers, but most get the type of vehicle that they need. For instance, if someone needs an eight-passenger car for his or her family, he or she is not going to not buy an SUV and instead drive separate cars around. “There are some things you’re not going to give up on,” he said. People get what they need. Millett said an indication of the market were the prices at car auctions. Prices of SUVs have dropped there, whereas the prices of other cars have stayed the same or even increased. “September was not a very strong month,” he said, but he thinks sales will pick up soon. He said some people don’t really consider GM for fuel efficiency, but the company is making great strides in its effort for a good reputation. “We are the leaders in fuel economy when you talk about pick-up trucks, full size SUVs, and everything like that,” he said. Keeping this in mind, Millett thinks it is important to note that consumers are not sacrificing things like tow capacity when they buy GM models. GM is a leader in 28 out of 53 passenger cars and 41 out of 66 truck models in fuel efficiency. They make 19 vehicle models that have the fuel efficiency of 30 miles per gallon or better. Its nearest competitor is Volkswagen, who makes 14 models with 30 miles per gallon or better. Millett stresses the idea that the uproar over gas prices is an emotional thing. “People who were going to run right out and get an SUV, they’ve held back a little bit,” he said. “They don’t think it out.”
