Gasoline Vehicle Purchases on the Rise

Low oil prices have increased purchases of gasoline and diesel-powered vehicles. Sales of gasoline and diesel vehicles rose 18 percent so far this year over 2015 levels. What's more, nearly 75 percent of the people who have traded in a hybrid or electric car to a dealer have replaced it with an all-gasoline vehicle. Further, the demand for trucks, SUVs and vans rebounded to historic levels after they dropped sharply in 2008, when gas was $4 a gallon. Sales of electric and hybrid vehicles dropped to 2.4 percent of new car sales. U.S. vehicle purchases used to be split 50 percent trucks and 50 percent cars, but now it is about 60 percent to 40 percent. Compared to the fourth quarter of 2014, the average U.S. household spends between $900 and $1,000 less each year for fuel that they now can use, at least partly, to buy more expensive vehicles—i.e. pickups and SUVs. U.S. consumers favor SUVs because they like being able to carry additional people and belongings, they like sitting higher up from the ground and they like the image projected by these vehicles.