Rising Gas Prices Raise Concerns

"Rising gas prices are raising plenty of concerns among dealers, but they need to resist overreacting to the situation.


AAA reports gas prices rose 30 cents per gallon in the past month, averaging more than $3.80. In some parts of the county they topped $4.

The truck market suffered a huge crash the last time prices reached that level.

That trends seems like it's repeating itself, as wholesale truck prices dropped 2.2 percent last month, according to ADESA Analytical Services.

This time differs from 2008 in important ways, however, said Tom Kontos, ADESA's executive vice president of industry analysis.

There were more factors than fuel pushing down the truck market then, he said.

One was the housing market's collapse. Contractors make up the largest buyers of pick-up trucks, especially used ones.

The other was the end of an SUV fad. That peaked in the early part of the decade and a glut of these unwanted vehicles came off lease in 2008.

The media reported a large increase in demand for alternative fuel vehicles during the last price spike, but that proved more hype than reality.

Recent surveys find little interest in these vehicles among consumers even in the greenest parts of the country.

A poll by a Seattle-based auto insurer found less than 2 percent of Northwest drivers say they own a hybrid vehicle.

That comes as little surprise to Paul Davis, owner of Metropolitan Motors in Seattle.

He doesn't stock hybrids at all due to a lack of consumer interest.


"There's just too many variables," Davis said. "The technology is changing so fast."

He took several hybrids as trades in recent years from consumers looking to downsize into less expensive vehicles. Davis sent all of them to local Toyota dealers." [Read more]