June 2008
How drivers have cut costs
In a similar survey we conducted last year, we found consumers ready to reduce their fuel costs by driving less, driving more
smoothly, and cutting back on spending for entertainment and restaurant meals. More troubling, 52 percent said they would
have difficulty paying for food and health care.
In this year's survey, we've found that motorists were true to their word. Respondents reported the changes they have made in their driving and lifestyle, including some tough sacrifices. The survey asked:
Changes made in the ways personal finances are managed could have long-term effects, signaled by reduced savings and increased debt.
On a national scale, the cumulative effect of these conservation methods and others is significant. Motorists drove 1.4 billion fewer highway miles in April 2008 than in the corresponding month a year earlier, according the Department of Transportation. Year-to-date through April, we see that a total of 20 billion fewer miles have been traveled than in 2007 for the corresponding period. Based on the 24.3-mile-per-gallon average reported in our survey, that translates to about 823 million gallons voluntarily saved by consumers thus far this year.
THE NEXT TIPPING POINT
Responses to this latest Auto Pulse survey show a median price of $4.32 per gallon as the new tipping point that would lead consumers to drastically reduce their driving even further. This marks a much narrower margin between national average prices and the median tipping point than in last year's survey, signaling that consumers now have less flexibility in their budgets. Among respondents to the 2008 survey, the tipping point has been crossed by 87 percent. Looking further down the road, we found that 80 percent would consider $5 per gallon to be the critical gasoline price—a figure that is already within reach for some parts of the country.
Less-affluent respondents have been hit hardest by fuel prices and their toll on other commodities. For those with a household income under $40,000, a median price of $3.99 was their tipping point; the national average has since moved past the $4 mark. Those drivers with a $75,000 or greater household income; 18-34-year-old drivers; and Westerners cited a higher $4.50 a gallon price as their critical point.
In this year's survey, we've found that motorists were true to their word. Respondents reported the changes they have made in their driving and lifestyle, including some tough sacrifices. The survey asked:
| What have you done in response to higher fuel costs? | |
|---|---|
| Driven less | 74% |
| Cut entertainment/restaurants | 63 |
| Driven slower, more smoothly | 59 |
| Scaled back vacation plans | 53 |
| Put less money in savings | 45 |
| Reduced food, health-care spending | 24 |
| Put more expenses on a credit card | 17 |
Changes made in the ways personal finances are managed could have long-term effects, signaled by reduced savings and increased debt.
| Many drivers also made changes in their transportation patterns to save money, including: | |
|---|---|
| Walked or bicycled more | 31% |
| Carpooled more | 24 |
| Worked from home | 18 |
| Used public transportation more | 16 |
| Moved closer to work | 10 |
On a national scale, the cumulative effect of these conservation methods and others is significant. Motorists drove 1.4 billion fewer highway miles in April 2008 than in the corresponding month a year earlier, according the Department of Transportation. Year-to-date through April, we see that a total of 20 billion fewer miles have been traveled than in 2007 for the corresponding period. Based on the 24.3-mile-per-gallon average reported in our survey, that translates to about 823 million gallons voluntarily saved by consumers thus far this year.
THE NEXT TIPPING POINT
Responses to this latest Auto Pulse survey show a median price of $4.32 per gallon as the new tipping point that would lead consumers to drastically reduce their driving even further. This marks a much narrower margin between national average prices and the median tipping point than in last year's survey, signaling that consumers now have less flexibility in their budgets. Among respondents to the 2008 survey, the tipping point has been crossed by 87 percent. Looking further down the road, we found that 80 percent would consider $5 per gallon to be the critical gasoline price—a figure that is already within reach for some parts of the country.
Less-affluent respondents have been hit hardest by fuel prices and their toll on other commodities. For those with a household income under $40,000, a median price of $3.99 was their tipping point; the national average has since moved past the $4 mark. Those drivers with a $75,000 or greater household income; 18-34-year-old drivers; and Westerners cited a higher $4.50 a gallon price as their critical point.
