Higher gas prices lead car shoppers to think ‘small’

Smaller vehicles and smaller engines get more notice from new-car buyers, a survey finds.

Taking small to extremes, Daimler AG's Smart Fortwo is under nine feet long and gets 33 mpg/city according to EPA standards.

Here’s more bad news for Detroit: Rising gasoline prices are starting to affect the new-car purchasing decisions of Americans.

Nearly all shoppers for new cars expect gasoline prices to rise in the next 30 days, according to a survey released Friday by Kelley Blue Book, which provides data on car prices. A majority of those shoppers say rising gas prices have caused them either to change their minds or to think about buying vehicles they ordinarily would not have considered. The biggest shift: smaller engines, followed by smaller cars.

The buying shift comes as gasoline prices are on the rise. According to AAA, the national automobile club, the price of a gallon of regular gasoline now averages $2.64, up from $2.59 a week ago and $2.26 a month ago.

In a finding that might have broader ramifications for the economy, the Kelley survey also found that 73 percent of those who saw gas prices increasing in May said they planned to change their spending habits if prices went much higher.

The findings may indicate that consumers are now so stretched that if gasoline hits $3 a gallon, it may have the same impact as when fuel rose above $4 a gallon last summer, says Jack Nerad, executive editorial director.

Three dollars a gallon, he says, may be the “point at which they [car buyers] change their mind about what vehicle to buy and how they spend their money.”

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