Gas prices bring plenty of complaints but little change from consumers

Drivers still opting for larger trucks and SUVs despite climbing fuel prices

Originally posted January 9, 2017

If I’m asked for advice about buying a car, I offer up one suggestion first and foremost: buy the car based on the whole price, not just the monthly payment. Now, I’m adding a second caveat to that: consider how much a tank of fuel might cost in that car within the range that fuel costs can fluctuate.

Of course this is about recent jumps at the pump. But there have always been increases in taxes, gas-jackings at long weekends and tragedy pricing whenever there is an oil spill or fire that oil companies seem uniquely good at pimping for a silver lining. Drivers are junkies, and they know it.

I have a lot of young people in my life, many commuting in transit-challenged areas for school to keep housing costs down and to jobs that get shifted on a whim. They know exactly how long a tank of fuel will last in the real world, and plan their do-not-overinflate budgets accordingly.

Speaking of the real world, I don’t know anyone who trusts the stickers in the car windows with fuel economy numbers; I know I don’t. We’ve been promised they’re getting better, and some are, but until they provide closer to actual, on-road usages, I continue to use them as a relative measure rather than an accurate one. You can compare them against each other, but not against actual performance. Much of that depends on how and where you drive, as well as the time of year. It only takes one harsh Canadian winter to have people crying fuel foul.

But consumers are a complicated lot, according the Automobile Protection Association (APA). “They respond one way in surveys and act another when they get in the showroom,” APA president George Iny explains. Over and over, they say they want fuel economy but ever increasing fuel prices do little to dampen their enthusiasm for buying bigger and bigger vehicles.

The same way consumers psychologically adjusted when the price per litre for gasoline broke the three-digit barrier, they have now apparently adapted to ever-increasing terms on loans. Taking five years to pay off a car was once the outer limits for average buyers; the introduction of 84- and 96-month terms should be a warning signal, not an invitation to buy more car than you can afford.

Will the latest round of fuel jumps change anything? John Raymond, a long-time industry consultant now with the APA, doesn’t think so.

“SUV sales will not change, except for some buyers converting to CUVs. Pickup sales will not change unless incentives dry up. People are tired of traditional three-box vehicles [sedans], that game is over. Hatchbacks are making a comeback, especially if they are two inches higher off the ground and have plastic appendages. Sports cars will continue to be making little more than a blip on the sales charts, because you get crazy performance from sport SUVs and premium cars today.”

If Raymond is right – and I think he is – ask yourself something as you go to purchase that SUV tomorrow. If a tank of fuel costs $75 and gets 600 kilometres, are you prepared for it to cost you $80? $90? More? Or will you simply believe that Canadians are somehow being punished more than other countries for exercising their right to drive comparatively huge vehicles?

As I write this, the average cost of gasoline around the world is $0.99 U.S./litre. On the chart, Canada sits at $0.95 U.S./litre, well down from Hong Kong’s $1.93 and places like Iceland, Norway, Israel, New Zealand, Italy and Greece – all commanding eye-popping prices. Historically, the higher the prices, the smaller the average cars on the road.

Maybe Canadians haven’t gotten the message because it’s never really been sent.

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2 responses to Gas prices bring plenty of complaints but little change from consumers

  1. Pat says:

    When I started driving , gas was 39c an imperial gallon.(4.5 liters) But, I was making $1.25 an hour at Canadian Tire. It’s all relative and it’s only the high mileage commuters that really suffer.
    For people like me who fill up twice a month, maybe, it’s a non starter.
    The price of vehicles, and insurance seem more relevant at this point.

  2. Cheryl says:

    I’m a Canadian expat living in Germany right now as as gas prices fluctuate around the €1.30 mark (approx. $1.90 CAD), I think this is definitely a factor in why you very rarely see any pickup trucks & SUVs aren’t nearly as common over here. It’s mainly small hatchbacks, sedans & station wagons.
    Another factor is the small/skinny roads, I went back to Canada for the holidays and driving from Pearson to Guelph I couldn’t get over the immense space we dedicate to roadways & shoulders.

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