Low gas prices boost SUV and pickup sales

Crude truth behind oil's global boom
Crude truth behind oil's global boom

Thanks to low gas prices, more Americans are buying big, gas-guzzling pickups and SUVs.

Sales of both jumped 10% this year, according to sales tracker Autodata. That's nearly twice the increase in overall vehicle sales.

Meanwhile, sales of some fuel efficient cars have plunged, even as the industry is on pace for record sales this year. Sales of Toyota (TM)'s Prius, the hybrid that pioneered that market, are down 12% this year, while sales of the Chevrolet Volt, one of the first mass market plug-in electric cars, are down 23%.

"Buyers seem quick to respond to changes in gas prices, both up and down," said Brandon Schoettle, a project manager studying fuel economy at the University of Michigan's Transportation Research Institute.

The fact that more people are buying SUVs and trucks has actually pushed he average mileage of all vehicle

The sales shift to SUVs and trucks has trimmed the average mileage of all vehicles sold in the U.S., according to Michigan's TRI. The average in November was 25 mpg, down about 1 mpg from the record high reached in August 2014, before gas prices started to slide.

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"I think most buyers assume, whether it's $2 a gallon gas or $4 a gallon, if they can get 25 mpg on a large truck or SUV, they're fine with it," said Karl Brauer, senior analyst at Kelley Blue Book.

Low fuel prices is also leaving more room in their budgets to buy more expensive vehicles than they would otherwise, said Michelle Krebs, senior analyst with Autotrader. That's also helping boost sales of SUVs and pickups, which are often more expensive than sedans.

"When the economy is better and interest rates and gas are low, you're going to buy as much car as you can," said Krebs.

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