Green Car Congress: Survey: US Consumers More Likely to Cut Discretionary Spending Than Use Alternative Transportation

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Survey: US Consumers More Likely to Cut Discretionary Spending Than Use Alternative Transportation

26 June 2007

Nearly half (47%) of US car owners are willing to buy a more fuel efficient car should gas prices increase $1, but a strong majority rule out using alternative transportation to offset rising gas prices and are more likely to cut discretionary spending, according to a survey by Discover Financial Services. Discover Financial Services is a business unit of Morgan Stanley, and operates the Discover Card with more than 50 million cardmembers.

The Discover Survey reported that half (50%) of car owners are driving vehicles that get less than 20 miles per gallon.

Nearly 60% of consumers are paying more than $100 a month for gas. As gas prices rise, our survey shows discretionary spending and even living expenses will most likely be reduced. But a dollar increase in gas prices may have a positive impact on the environment as almost half of the car owners surveyed said they would be somewhat or very likely to buy a more fuel efficient car.

—Ed Stolbof, Senior Vice President of Marketing for Discover Financial Services

Although 75% of car owners said they were likely to drive less if gas prices increased $1, there seems to be little support for alternative transportation.

The Discover Survey reported:

61% were not very or at all likely to walk or ride a bicycle;
Less than one in four (24%) were somewhat or very likely to take public transportation;
45% of consumers were somewhat or very likely to carpool;
59% of women said they would be ‘very likely’ to drive less compared to just 41% of men; and
Nearly one-third (29%) of women also were more likely to use carpools versus 21% for men.

The results of the new survey conducted as part of the Discover Spending Confidence Monitor indicate that 80% of Americans find their car very important in their everyday lives. This may explain why car owners are ready to sacrifice non-essential items in their lives rather than their cars if gas prices increase $1, Discover suggests.

According to the survey, if gas prices increase $1.00:

70% of car owners said they will cut back on entertainment spending;
66% said they will change their vacation plan;
64% said they will postpone a major purchase; and
52% said they were somewhat or very likely to cut back on grocery spending.

It appears the first line of defense to lessen the impact of rising gas prices is expense management. Consumers are likely to cut back discretionary spending, but rising gas prices may force some to go a step further by cutting into living expenses as well.

—Ed Stolbof

June 26, 2007 in Fuel Efficiency, Market Background | Permalink | Comments (30) | TrackBack (0)

Comments

wintermane,

[in the voice of Yoda] one anecdote does not a statistical trend make...

I guess I should be deathly ill for all the buses & trains I have ridden on in the past few months? My children as well because I've taken them on some of those buses as well.

Let us see something here: Poor people go to work sick ...and drug resistant bugs...hmmm, those bugs don't gain a drug resistance unless you can afford the medication and then fail to utilize it properly. If they are too poor to take a day off from work, they probably won't spend two to four days worth of wages to see a doctor, get a Rx, and purchase the medicine. Additionally, those poorer people tend to work the jobs most people don't want to such as: Food Service, Janitorial jobs, menial labor, etc...I hope you don't go to any fast food places or restaraunts as they are packed with people and the poor people are the ones handling all your food. Oh no! Poor people also pick your crops unless you have a garden!

Posted by: Patrick | June 27, 2007 at 09:40 AM

Well good for you we didnt live in a city with clean busses and had alot more sick poor people on em. We live in a much nicer area now and im not even sure if they have busses here.. I think they only jave vans.

Like it or not MASS transit does have a connotation in many places of festering pox boxes. You always wonder what they heck the guy with the weird lesions has as he coughs that horrid gurgle.

As for food... thats what washing and cooking deal with.. my best friends as a young kid were illegal immigrabts and what they told me... eeeeeeeeeeeeeeeeeeew!!!!!!! Things are supposedly better these days... but not much.

Posted by: wintermane | June 27, 2007 at 12:38 PM

Re: "It's a sad state of affairs when a majority of people say they would cut back on food to accommodate their driving."

Peter (and other city dwellers)- Believe it or not, there are quite a few of us that live where there is NO public transportation available. As the cost of fuel raises, we have no alternative but to cut back on discretionary spending.

Posted by: Bob | June 27, 2007 at 11:16 PM

Nick,

A modern mass transit system as opposed to the 1870's era antiques, takes you from Point A to Point B where you really want to go. It does NOT make you go to A', near where you start, to B', near where you want to go. Leaving you to get from A to A' and B' to B.

Decentralized private autos when under non human control, fully using the roadway and not constantly effecting waves of compression and extension as human traffic does,(stop-and go) is coming. The individual auto is close to having the necessary components and are all falling in place.

Drive by wire, steer by wire, brake by wire, GPS, intelligent cruise control, to maintain spacing, wireless comm, for communications, et cetera, are some of the components.

Within a decade or two, you'll be able to drive to work and the the modern mass transit vehicle will drop you off at the entrance, rather than some distant parking facility.

It will return home, itself, retracing it route in reverse, for use by other family members eliminating parking problems and the need for multiple vehicles, perhaps recharging itself, or earning money on V-to-G. At the appropriate time, the vehicle will return to pick you up, or when summoned, and return you home or wherever you wish to go on some other engagement.

Similar but better than having a Limousine and Chauffeur, as that is what modern mass transit will REALLY (and SHOULD BE) be like.

No more A to A', B' to B considerations.

George,

I lived in Manhattan for almost half a year one period, commuting by plane shuttle from DC, and inside the City, used the Subway as opposed to the taxi, or auto.

I worked in DC and lived in the Suburbs, so took "mass transit" or private auto to work, and then used the Metro subway to various business in the DC metro area.

I even worked in NYC on another occasion for 4 months and commuted, BY ELEVATOR, from the hotel halfway up one Twin Tower to the mezzanine and to the 97th floor of the other Twin Tower. That "commute" took almost 25 minutes by the way! I observed that I needed at least six rides (often more) to "commute". Local elevator to express; to local; to local; to multiple slide ways, to local; to express; to local; to express; to local.

Those are exceptions. The government is concentrated in the federal enclave and the expenditure for the Metro was/is gargantuan and undoable elsewhere without unlimited federal funding. Business in Manhattan that I did, was concentrated in Manhattan.

Those were very special cases.

The more common situation would have required private/rental autos.

Posted by: Stan Peterson | June 28, 2007 at 10:59 AM

This is not surprsing since Mass transit as presently constituted a leftover of 1870's technologies, is not suited to the Amercan city as built over the last hundred years.

Not true! American cities were quite suited to Mass transit until after WWII, when GM finished buying and closing down city trolley systems.

Great American Streetcar Scandal

Posted by: DS | July 03, 2007 at 12:12 PM