In 2008, high fuel costs sent the Lehigh Valley's auto-buying market into a frenzy as dealerships were saddled with SUVs and other large vehicles consumers passed up for compact cars.
Now, as analysts predict fuel costs will reach $4 or more by summer, many auto dealerships in the Lehigh Valley remain largely unaffected, as customers look for vehicles — even big ones — with better gas mileage or smaller engines.
"There hasn't been an issue," said Chris Zerfass, general manager of Bennett Toyota in
. "As the price of a gallon of gas has inched up in the recent months, it has not been a main deterrent and, fortunately, sales have been good for us."
Zerfass' comments are echoed by many dealerships throughout the region. Their results are in line with what an industry expert predicts to be positive sales this year because automakers are producing more fuel-efficient vehicles at a time of pent-up consumer demand.
"With the age of cars and trucks on the road today at an average 11.1 years, many consumers feel they can no longer delay making a purchase of a new or newer vehicle," said
, chief economist for the National Automobile Dealers Association.
In February, Taylor predicted the nation's auto industry will sell or lease 13.9 million new cars and light trucks this year, about 10 percent more than in 2011.
In addition to aging cars, issues that spur strong sales are better credit conditions, more generous incentives from manufacturers and low interest rates, Taylor added.
Taylor said one- to five-year-old used vehicles are in short supply and selling at higher-than-usual prices. He said 5 million vehicles weren't traded in during the recession, which has bumped up the average age of cars and light trucks.
The shock about gas prices is not the same as in 2008, because consumers are more accustomed to higher prices at the pump, Taylor said.
"It would have more of an effect if it was a sudden surge, but it's been a modest price increase we have seen in a year or so," he added.
In 2008 gas prices surged quickly, along with the nation's inflation. That's contrary to this year's gains in gasoline prices — which followed recent months of declines — a reflection of tensions in the Middle East.
That has translated into extra costs at the pump.
After rising throughout January, the national price for regular unleaded gasoline rose to $3.58 a gallon in the week through mid-February, according to the Energy Information Administration. It had started the year around $3.32 a gallon.
Analysts forecast the price may rise to $4.13 per gallon, up from an average of $3.51 last year.
Gasoline prices peaked around $4.02 a gallon in May last year, not far from the all-time high of $4.16 a gallon reached in July 2008.
Taylor said auto manufacturers have prepared dealerships for elevated fuel costs with more-efficient vehicles such as hybrids to SUVs that can get 30 miles or more per gallon.
Still, some consumers have already changed plans.
"The change buyers may make is to buy the same vehicle but a more economic engine choice like a four-cylinder in a midsize sedan over the V-6," Taylor said. "In that regard, a number of the manufacturers have high-mileage special versions with smaller engines."
There's been some shifting to smaller engines at Rentschler
, Jeep, Dodge in
"We have seen a pullback on the V-8 for the V-6 engines," dealership owner Fred Rentschler said.
The downsizing trend goes beyond Rentschler's dealership, since industry data provider TrueCar.com reported in February that fuel economy numbers from January light-vehicle sales increased to 22.9 mpg in January, up from 22 mpg for the same month a year ago, and larger than 22.2 in December 2011.
"The national gas price average reached its highest levels ever in January and consumers continue to snap up the most fuel-efficient vehicles," Jesse Toprak, vice president of market intelligence at TrueCar.com, said in a written statement. "If gas prices continue to increase, as expected over the spring and into the summer, we will continue to see record average fuel economy of newly purchased vehicles."
Rentschler said not everyone is buying small since pickup and SUV sales still remain strong, a situation mirrored at Bennett Toyota.
"Highlander sales are up compared to a year ago. People are still buying SUVs and that may increase if we ever get some snow," Zerfass said. "There was tremendous pent-up demand and as we are experiencing at Bennett, it seems that the credit freeze has thawed and there [is] just more activity in the showroom."
Still, the smaller-vehicle boon coincides with Taylor's prediction in February that if gas prices jump this year, dealerships can expect a boost in sales of smaller and alternative fuel vehicles.
That has had some Valley used-car dealerships trying to gobble up as many used cars as possible. Customer 1 Auto in
, for example, has been looking for more compact cars.
"We're selling a lot SUVs and people really like the four-wheel drive feature," partner Jeff Minnich said. "People are coming in for those, but we can use a lot more four cylinder vehicles … . If we can get a dozen we would buy them right now."