$1 increase would cause nearly half of Americans to seek a more
fuel efficient vehicle
Riverwoods, IL, June 26, 2007 – Nine out of ten American adults claim they are paying close attention to the rising cost of gasoline – in fact, two-thirds can quote the per gallon price within 30 cents. While nearly half of car owners said they are willing to buy a more fuel efficient car should gas prices increase $1, a strong majority ruled out using alternative transportation to offset rising gas prices and are more likely to cut discretionary spending.
According to a new survey conducted as part of the Discover® Spending Confidence Monitorsm, 80 percent 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.
Cutbacks Would Most Likely Affect Vacations, Entertainment Spending, Major Purchases
According to the survey:
- 70 percent of car owners said they will cut back on entertainment spending if gas prices were to increase a dollar,
- 66 percent said they will change their vacation plans, and
- 64 percent said they will postpone a major purchase
“It appears the first line of defense to lessen the impact of rising gas prices is expense management,” said Ed Stolbof, Senior Vice President of Marketing for Discover Financial Services.” ”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.”
Stolbof also noted that more than half (52 percent) of those polled said they were somewhat or very likely to cut back on grocery spending if gas prices rose a $1.
Alternative Transportation Would Not Be a Popular Option
Although 75 percent 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 percent were not very or at all likely to walk or ride a bicycle
- Less than one in four (24 percent) were somewhat or very likely to take public transportation
Carpooling was the most popular option as 45 percent of consumers
said they were somewhat or very likely to carpool.
Women More Likely Than Men to Take Eco-Friendly Measures
Although responses from last month's survey were remarkably consistent across gender, income and age, there were some notable contrasts. Women are more likely than men to take eco-friendly measures when it comes to driving.
According to the Survey:
- 59 percent of women said they would be ‘very likely' to drive less compared to just forty-one percent of men if gas rose a dollar
- Nearly one-third (29 percent) of women also were more likely to use carpools versus 21 percent for men
As Gas Prices Increase, So Does Demand for Fuel Efficient Cars
While the survey revealed alternative transportation would not be very popular should gas prices increase $1, rising gas prices may give incentive for car owners to swap gas guzzling vehicles for more fuel efficient cars.
The Discover Survey reported:
- Half (50 percent) of car owners are driving vehicles that get less than 20 miles per gallon
- A like number (47 percent) said they are somewhat or very likely to buy a more fuel efficient car if gas prices rose a dollar
“Nearly 60 percent of consumers are paying more than $100 a month for
gas,” said Stolbof. “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.”
(Note: The average price for regular unleaded was $3.14 at the time of the survey)
About Discover Financial Services
Discover Financial Services, a business unit of Morgan Stanley (NYSE: MS), operates the Discover Card with more than 50 million cardmembers, the Discover Network with millions of merchant and cash access locations, and the Goldfish credit card business in the United Kingdom. Discover Financial Services also operates the PULSE ATM/debit network, which serves more than 4,400 financial institutions and includes nearly 260,000 ATMs, as well as POS terminals, nationwide. For more information, visit www.discoverfinancial.com, www.discovercard.com, www.discovernetwork.com or www.pulse-eft.com.
Contact: Matthew Towson
224-405-5649
matthewtowson@discoverfinancial.com