SUVs Are Still Popular, Despite Rising Oil Prices and Alternatives

Last week, the cost of oil hit the highest point since the recession started, briefly bumping the $100 mark. Fuel prices are still headed north too – but that isn’t stopping people from buying gas-guzzling SUVs, according to a new report from AutoTrader.com.

The report examines what visitors were searching for last month, and it finds trucks and SUVs accounted for:

• 9 of the top 20 most-searched new cars
• 12 of the top 20 most-searched used cars
• 11 of the top 20 most-searched certified pre-owned cars

On top of that, the report takes a longer view and notices that three of the four models that surged in popularity over the past year – moving up at least 25 places in search rankings – were SUVs, including the Honda CR-V, Ford Explorer, and Jeep Grand Cherokee. The only non-SUV up in popularity? The Hyundai Sonata, whose current year model gets up to 35 mpg, according to Edmunds.com.

Gas price spikes desensitizing us?

It sounds weird that SUVs would be enjoying such popularity again. Remember Cash for Clunkers just two years ago? And all the hype about electric cars?

AutoTrader CEO Chip Perry has a theory.

“Every time there’s a spike in gas prices the ‘new normal’ for gas prices goes up,” Perry says.

While fuel efficiency tends to take the wheel after price spikes, it quickly takes a backseat to other priorities like size and style. “Right now, consumers seem relatively comfortable with the price of gas, which pushes other things to the top of their consideration lists when shopping for a car – things like utility, style and size,” Perry says.

So we’ve already gotten used to $3/gallon gas. But AutoTrader thinks a $3.50 average may be a tipping point that will rev up interest in efficiency again.

Electric market not getting the jolt it needs yet

Electric cars may make sense in the long run, especially for the environment – but right now there are a lot of challenges both for those designing and those driving them. We recently covered the consumer side in 5 Reasons NOT to Buy an Electric Car. But a new research report from tech consulting company Accenture highlights the challenges for the electric car market itself [PDF]:

• Cost. The business case for infrastructure investment – building charging stations that will function like gas stations do now – is weak because of high costs and the current consumer preference to charge at home. Accenture says pilot studies “reveal a risk that consumers may not use public charging spots at rates required to recover costs, which range from approximately $5,000 per charging station to $50,000 for units capable of fast charging a car in approximately 30 minutes.” And until it’s clear electric will be profitable, few will want to jump on board – which means there won’t be enough charging stations to go long distances, which means fewer people will see the benefits of going electric.
• Control. With electric cars generally meeting the needs of urban drivers with shorter commutes, not everyone will charge daily. Apparently, this creates some uncertainty for utility companies. Accenture says irregular charging “increases unpredictability and reduces control. Plugging in vehicles whenever parked will help grid management, easing the strain on the grid.” Basically, utilities need to figure out how to reallocate their resources and how to pay for this new use.
• Scale. With so few people driving electric cars right now, it’s hard to get a good read on their long-term impact or what will happen when the market starts picking up. Accenture says there’s currently no thorough way “to robustly test the technologies and their integration with each other.” Safety and security standards also need to be developed, alongside consumer education programs.

So, sure, it’s 2011 and we all thought we’d be driving flying cars now — but the truth is we’re still struggling with electric ones.

For everybody looking to save money despite driving good, old-fashioned, 20th-century gasoline-powered cars, check out 28 Ways to Save On Gas and Diesel Vehicles: More for Your Money?