New Consumer Reports Auto Pulse Survey: Struggling Drivers Blame Washington For High Gas Prices

YONKERS, N.Y., June 26, 2008; Americans have found someone to blame for the soaring gas prices that have lead to drastic lifestyle changes, financial struggles, and desperate car-buying decisions: Washington.

The latest Auto Pulse Survey conducted by the Consumer Reports National Research Center shows more than three quarters (77%) of consumers singling out the government's failure to implement an effective energy policy as a root cause for high gas prices, with many also blaming oil companies (75%) and foreign oil producers (70%). The survey also shows a critical tipping point for motorists has been crossed, with another lifestyle-changing milestone just around the corner. Complete details can be found online at www.ConsumerReports.org/fuel.

  Consumer Reports Auto Pulse Survey Highlights

  --  79% of car shoppers intend to buy a vehicle with better fuel economy.
  --  80% of car shoppers are considering a diesel, flex-fuel, or hybrid
      vehicle.
  --  54% would pay more for a more fuel-efficient vehicle.
  --  74% are driving less due to fuel costs.
  --  $4.32 is the median tipping point when drivers would further
      drastically curtail driving.
  --  26% have considered a motorcycle or motor scooter.

Gas prices have climbed 38 percent in recent months, from $2.96 per gallon (February 11, 2008) to $4.08 (June 23), according to data from the Energy Information Administration. The Consumer Reports' survey found that in addition to the federal government, a majority of Americans feel oil companies (75%), foreign oil producers (70%), and Middle East conflict (68%), are among the leading causes for the increase.

Consumer Reports also asked what actions the federal government could take to reduce fuel costs:

  --  90% Increase support for alternative energy development
  --  84% Negotiate lower prices with oil-exporting nations
  --  83% Encourage conservation through tax incentives, alternative
      transportation
  --  81% Allow more drilling in the U.S. and offshore

  A NEW TIPPING POINT

In the 2007 Auto Pulse survey on gas prices, Consumer Reports found the tipping point at which motorists said they would drastically reduce driving would be $3.50. And they have. Year-to-date, 20 billion fewer miles have been traveled compared to 2007 for the same period, according to the Department of Transportation.

Responses to this latest Auto Pulse survey show a median price of $4.32 per gallon as the new tipping point that would lead them to drastically reduce their driving even further. This marks a much narrower margin between national average prices and the median tipping point than in last year's survey, signaling that consumers now have less flexibility in their budgets.

AMERICANS FEEL IMPACT FROM RISING FUEL COSTS

Consumer Reports found high gas prices are not only forcing consumers to cut back on driving, vacations, and entertainment spending, but to struggle with essentials like food and health-care costs. Households with less than $40,000 annual income are being especially hard hit.

Forty-five percent of respondents have been putting less money into savings accounts; 24 percent have cut back on essentials like food or healthcare; and 17 percent have charged more expenses on credit cards--all troubling trends. Many drivers also made changes in their transportation patterns to save money, including:

  --  31% Walked or bicycled more
  --  24% Carpooled more
  --  18% Worked from home
  --  16% Used public transportation more
  --  10% Moved closer to work

  CAR BUYERS FOCUS ON FUEL ECONOMY AND ALTERNATIVE POWERTRAINS

When it comes to choosing a new car, 31 percent of new-car shoppers identified fuel economy as the most important consideration, nearly double the share recorded in 2007. While nearly 80 percent of car shoppers want better fuel economy, 69 percent still want a same-sized or larger vehicle. That said, literally no respondents wanted a much-larger vehicle, suggesting automakers face an immense challenge getting new customers into full-sized pickup trucks and SUVs.

Compared against last year's survey, Consumer Reports found motorists are more interested in alternative engine types (80% vs. 47%). Among those planning to purchase a new car, 37 percent (vs. 24% in 2007) are considering a flex-fuel vehicle; 32 percent a hybrid (vs. 28%); and 30 percent a diesel (vs. 11%).

Ultimately, most drivers could make some compromise to improve fuel economy. What drivers would do to reduce amount spent on fuel:

  --  54% Pay extra for more efficient vehicle
  --  49% Compromise on size or capacity
  --  38% Compromise on amenities or comfort
  --  31% Compromise on performance
  --  15% Compromise on safety

More than one quarter of consumers have considered the ultimate vehicle downsize--giving up two wheels. Among them, 18 percent have contemplated a motorcycle and 14 percent were drawn to motor scooters. Men and respondents, aged 18-34, were most fond of this alternative.

With more than 7 million print and online subscribers, Consumer Reports is one of the most trusted sources for information and advice on consumer products and services. It conducts the most comprehensive auto-test program of any U.S. publication or Web site; the magazine's auto experts have decades of experience in driving, testing, and reporting on cars. To become a subscriber, consumers can call 1-800-234-1645. Information and articles from the magazine can be accessed online at www.ConsumerReports.org.

The Consumer Reports National Research Center conducted a telephone survey using a nationally representative probability sample of telephone households. 884 interviews were completed among adults aged 18+ who drive a vehicle and whose household owns at least one vehicle. Interviewing took place over June 5-8, 2008. The sampling error is +/- 3.4% at a 95% confidence level.

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