An economist says he gave up forecasting oil prices. He swore off that after realizing his prognostications oh so many times missed the mark like a bent rifle.
Predicting pump prices is akin to flipping playing cards and saying the next one is an ace. You are right four times out of 52, about 7.6%. That won’t win seer-of-the-year honors.
But in one respect there is a “magic” number for gasoline prices, according to a new MaritzCX study on car-consumer behavior.
The market-research firm identifies $3 per gallon as the point at which car buyers begin to cite the cost of fuel as a major purchase consideration.
Over the past 10 years, fuel economy, more than any other purchase consideration, has climbed up and down the importance scale. It has soared like a rocketing pheasant to No.1 any time gasoline exceeds $3 a gallon. It has dropped to as low as No.10 when pump prices go under $2.50.
As said, gasoline-price divining comes with risks of inaccuracy, but here’s a forecast from Shawn St. Clair, MaritzCX’s global syndication director:
“With gas prices projected to remain under $3 per gallon over the next couple of years, we would look for fuel economy to remain at or near the bottom of the top 10 reasons to purchase.”
The survey of new-car buyers says chief reasons for buying a vehicle include quality and value for the money. Only 4% cited fuel economy in 2016.
Mileage ranks higher for shoppers in certain vehicle segments and lower in others, according to new research from CDK, a provider of information services to dealers.
Part of CDK’s ongoing “Language of Closers,” the study identifies top words and phrases that help convert dealership just-looking shoppers into sign-here buyers.
For example, “mileage” is a low-converting word in the sedan segment “presumably because most sedans have good gas mileage,” the study says.
Yet it’s a high-converting word in the truck segment. Conventional wisdom might suggest fuel economy is a minor consideration for someone looking at a Ford F-250 heavy-duty pickup that gets 11.8 mpg (5.0 L/100 km).
But CDK says it is precisely because pickups aren’t known as gas sippers that one stands out when it gets relatively good fuel economy.
When I was a young reporter in the 1970s, my newspaper had a weekly series that tracked rising fuel prices rather dramatically as they approached $1 a gallon, the black-magic number back then.
The feeling was when we reached that price point, it would end civilization as we knew it. Wouldn’t you know it, though, life went on after we hit a buck.
The 1970s was an uncertain time when some so-called experts, gazing into cracked crystal balls, predicted we’d deplete the world’s oil supply by the end of the 20th century. To that outrageously wrong prediction, today we can say, for better or worse, “Fill ’er up.”
We’ve seen fuel prices rise to $4 a gallon in 2008 and drop to below $2 in recent times. Yes, they’ll probably exceed $3 a gallon again. But don’t ask when.