How Current Gas Prices Are Impacting the Auto Industry

When was the last time that you fueled up your vehicle? Do you remember how much it cost?

If you drive a car with a full-sized tank, then it’s likely that you spent at least $60 or more, and even over $100 if you’re a California resident. And for auto transport drivers who drive 16-wheelers, that cost is even higher, which cuts directly into their profits.

Gasoline is at an all-time high, thanks to many different factors like inflation, the overseas conflict, and more. And while combined with other issues like chip shortages and ongoing supply chain issues, the auto industry isn’t in its best shape currently. High gas prices are affecting the auto industry in more ways than one, and they’re mostly negative ways; let’s dive in.

Fuel-Efficient Cars are in Higher Demand, And More Expensive

Inflated fuel prices have resulted in many consumers looking for more fuel-efficient vehicles, including hybrids and full-on electric cars. This makes complete sense, as gasoline prices have gotten so high that the average consumer now spends an additional $727 on gas this year, compared to the 2017-2021 average.

Because of this massive increase in gasoline costs, consumers want cheaper alternatives. And with hybrids and EVs becoming more and more common in recent years, their lower fueling costs now seem far more attractive to drivers.

But this also comes with a huge caveat – because of the increased demand for them, many fuel-efficient cars have risen significantly in price. Since supply cannot reach the demand of consumers, used EVs like the Tesla Model 3 have become far higher than they were only a year or two ago. Many of these fuel-efficient cars are now more expensive used than their original MSRP, making them a hefty investment. But this hasn’t detracted consumers, as many of them still find their higher prices more attractive than gas guzzlers. 

Fewer New Car Sales

Another issue that high car prices are causing is that fewer new cars are getting sold. With the rise of gas prices and vehicles alike, more and more consumers are getting priced out of the market. This means that fewer consumers are able to afford new cars, and are instead holding off on buying until the market (eventually) calms down a bit.

This affects consumers, dealers, and even auto transport workers negatively, with consumers left with driving older and less reliable vehicles, and dealerships losing out on potential customers. This lose-lose situation, unfortunately, hurts the market and the economy and pays no one any favors.

How Gas Prices Can Recover

Fortunately, this likely isn’t a permanent issue. Gas prices will more than likely go down eventually; it just isn’t yet certain when that will happen. There are several ways in which this can occur: matching the supply to the current demand is obviously the best way to curb gas prices, though that solution is more easily said than done.

One bit of good news to share is the gas price national average did manage to fall below $5 per gallon, which is the first time gas has dropped since April of this year. Some analysts are predicting that prices could fall again next week, which is at least a small sign of hope for consumers.

Save Time and Money With Super Dispatch

If you happen to work in the auto transport industry, then you’re well aware of the high expenses currently facing the industry. In order to survive nowadays, you’ve got to take advantage of every tool at your disposal; transportation management software is one of the best tools for saving time and money, allowing for automation and simplification tasks like filing paperwork, communicating with car haulers, managing inventory, and much more. 

If this sounds like something that your auto transport business could benefit from, then consider trying Super Dispatch’s Shipper TMS. Request a demo today!

Published on July 5, 2022