KBB.com study: Lower gas prices have buyers thinking big

By KBB.com Editors on July 13, 2012 12:58 PM

KBB Study

Data from the latest Kelley Blue Book Market Report indicates that the profound decline in gasoline prices over the last several months has led a number of U.S. car buyers -- specifically those in the market for sedans -- to upsize their choices and forsake compact four-door models in favor of mid-size alternatives. The average cost of a gallon of gasoline has dropped by more than $0.50 since April on a nationwide basis, and while sales of compact sedans are up a nominal 1.4 percent compared to last year, they remain far below the 22 percent rise for the auto industry in general. By comparison, sales of mid-size sedans -- which accounted for 18.6 percent of the total market in June -- have skyrocketed by some 44 percent on a year-over-year basis.

According to KBB.com's Analytic Insights Team, reduced prices at the pump are only one facet of this dramatic shift in preference. They attribute the surge in mid-size sales more to the impact of both new and outgoing models. Of particular note are the popularity of the new Toyota Camry and the ready availability of significant incentives on other key segment players like the Chevrolet Malibu, Ford Fusion, Honda Accord and Nissan Altima, all of which are expected to receive redesigns/upgrades by year's end. The lure of up to $3,000 in cash rebates and near zero-percent financing for up to 60 months seems to be proving just the motivation buyers need, as sales for each are currently running in excess of 20,000 units per month.