Consumers base their car-purchasing decisions based on the price of gas.

The trend of people downsizing vehicles they own maybe be repeating itself.  This trend began in 2008 when the price of gas skyrocketed.

Bob Anderson, a Luther Mankato Honda sales consultant has seen this first hand.  “When gas prices go up, the focus goes to vehicles that get high gas mileage,” but the opposite is also true; when gas prices are lower, people tend to buy bigger cars with lower gas mileage.

When gas prices fell from $4 to $3 a gallon in 2008, Anderson said that the demand for larger vehicles rose accordingly.

Last week in Mankato, gasoline was at about #3.60 per gallon, but that might change in a very short time.  The U.S. Energy Information Administration said there is a 25 percent chance that by summer, gas prices will have surpassed $4 a gallon.

This report, was released just 24 hours after oil prices hit their highest point in over two years.

Pat Adams, a sales manager at Mankato Motor Co. says that he hasn’t noticed as big of a customer push toward better mileage cars as he did in 2008.  Adams thinks that the reason for this is because, now, people may be better prepared for higher gas prices.

Ben Heintz of Heintz Toyota agrees with Adams.  Heintz seems to think that purchasing choices will continue to follow what is expected of them as long as gas prices hold steady at where they are now. “Gas isn’t high-enough-priced yet, but once it reaches $4, then people will get a little goofy and panic a bit.  Four dollar to $5 gas has a lot of people concerned.”

Aside from people being concerned about fuel prices, companies show concern as well.  Volk Transfer of Mankato, a company that uses fuel in mass quantities, logs more than one million miles of driving a year.

Jane Goettl, the human resources and safety manager for Volk Transfer, said the company has taken measures in order to monitor its fuel expenses.  These measures include fuel-conservation incentives for drivers as well as lowering it’s trucks top speed to 68 mph, down from 74.

In the meantime, car dealers say the sale of four-cylinder and hybrid vehicles continue to move off of dealer lots at close to the same pace as they did  in 2008 when fuel prices rose dramatically.

A recent survey conducted by Kelley Blue Book, a reference guide for vehicle values and pricing, showed that four our of five consumers say that their car choices are influence by gas prices.

However because large trucks and SUVs are required for work purposes and people who spend a lot of time outdoors, there is still a reoccurring demand for them.

Meredith Frank of New Ulm doesn’t find the price of gases to her liking.  For the past four years, she has commuted to her job in Mankato.  “It’s getting old,” she said.  The SUV she drives costs around $70 to fill up.

Frank said that having a more-fuel efficient vehicle would be nice but she feels her four-wheel drive SUV ensures her safety in the snowy winters.


Keywords:  Gas Prices, Mankato, Mankato Motor Co.