By Amanda Galbraith
Skyrocketing gas prices are causing prospective car owners to reconsider what kind of vehicle they buy, say several local car dealers.
With gas prices expected to break the $1-a-litre mark in major urban centres for the first time in Canadian history, consumers are making fuel efficiency their top priority when buying a new or used car.
“It’s definitely one of the very first things people are asking about,” says Dave Darrett, general manager of Ottawa’s Tony Graham Lexus Toyota.
“It used to be interest rates, now it’s gas prices.”
Darrett isn’t the only one noticing the trend, as used car dealerships in Centretown are also observing the difference in consumer attitudes.
“They’re buying more economy cars now, and are more concerned about saving gas,” says Joe Barake, manager of MB Auto Sales on Gladstone Street.
Barake says that while customers are definitely concerned about increased costs of owning a vehicle, he hasn’t seen a loss in business.
Instead, he’s seen a shift in the type of cars people are buying.
“There hasn’t really been a downturn,” he says.
“There is more of a demand for smaller four cylinder cars like Toyota Corollas and Toyota Echoes.”
But as buyers are looking towards more compact fuel-efficient vehicles, industry giants like Ford, General Motors and Chrysler are feeling the crunch. Their sales are down 11 per cent from last year, while Japanese and Korean car manufactures have seen a concurrent jump in revenues.
The reason, say industry analysts, is that companies like Toyota and Honda are seen to be more reliable and cheaper on fuel.
Centretown resident Elizabeth Kirkpatrick says those are exactly the reasons she and her fiancée drove off with a silver 2001 Honda Civic last October when they purchased their first car.
Kirkpatrick says that she never even considered buying anything else.
“The price of gas was a big consideration. As new graduates we have very little money to go around,” she says, noting that everyone in her family owns a Honda.
“We had no interest in buying a truck that guzzles gas.”
Since more and more people like Kirkpatrick are flooding the marketplace, international automakers recently signed a landmark agreement on April 5 with the federal government ensuring that by 2010 all new cars will emit 5.3 million fewer tonnes of greenhouse gasses.
Attempting to meet Kyoto requirements, manufacturer’s plan to introduce more fuel-saving technologies like hybrid engines, modern diesels, cylinder deactivation and automatic tire inflation.
According to Darrett, sales of hybrid cars on his Merivale Road lot have been on the rise.
“Last year we sold five or six cars, this year we’ve gone up to almost 80 vehicles,” he says, adding that he is expecting to get two new types of hybrid vehicles over the summer.
“Toyota is ahead of the curve with hybrid technology. You’ll see everyone else jump on that bandwagon.”
But while the prospect of avoiding getting gouged at the pump seems novel, some consumers are finding the cars a little pricey.
“The entry price point for a hybrid car is really high. You could buy a luxury car for that,” says Craig Maguire, who commutes to his Centretown office five days a week from Orleans.
He says he’s been looking at buying a new car for the past few months. “If I’m going to spend $40,000 on a vehicle, I’m not going to get a Toyota Prius.”
According to Barake, attitudes like Maguire’s are common among customers he encounters.
“Some people like luxury cars — they’re going to buy what they want no matter what.”
Kirkpatrick also says price was a factor for her when looking at vehicles equipped with fuel-saving technology.
“We would have liked to get one, but they’re way out of our price range,” she says, adding that since she and her fiancée were looking at used cars, hybrids were hard to come by.
Barake, whose company has been in the business of selling used cars in Centretown for 30 years, says they try to cater to the growing needs and demands of their customers, and that he has yet to purchase a hybrid vehicle.
“I’ve had some available to me, but I haven’t purchased any,” he says of the hybrid cars. “We should start seeing them on our lot next year or the year after.”
With gas prices on the rise and no relief expected in the near future, rather than shell out big bucks for a new vehicle, some owners like Maguire and Kirkpatrick are just leaving their cars at home.
“Prices right now are ridiculous,” says Kirkpatrick.
“Last night it was 93.1 cents a litre,” adds Maguire. “It’s crazy.