Transportation & Fuel Source Technology
Alternative-Fueled Vehicles Seriously Considered by One-Third of U.S. Adults
A recent Wall Street Journal Online/Harris Interactive Personal Finance Poll reveals that one-third (33%) of U.S. adults who plan to purchase or lease a new vehicle say they are most likely to seriously consider an alternative-fueled vehicle for their next purchase. Most (92%) of these adults are willing to pay more for it than a traditional, gasoline-powered version of the same vehicle. Top reasons for considering an alternative-fueled vehicle include concerns for the environment and the cost of fuel. The survey also explores how consumers plan to pay for their next new vehicle, and what financial factors are most important to them when making their next new vehicle purchase.
These are some of the results of an online survey of 2,516 U.S. adults conducted by Harris Interactive® between April 4 and 6, 2006 for The Wall Street Journal Online's Personal Journal Edition.
Types of vehicles considered
Almost three in five (58%) adults plan on purchasing a new vehicle, and while 37 percent say they are most likely to seriously consider a traditional, gas-fueled vehicle, many say they will seriously consider a hybrid (25%), ethanol-fueled (7%), or diesel-fueled (2%) vehicle. Those most likely to consider alternative-fueled vehicles include:
-- Those who live in the West (38%)
-- Young adults age 18 to 34 (36%)
-- College graduates (44%)
-- Those with an income of $75K or more (40%)
Paying more for alternative-fueled vehicles
Only eight percent of adults who will likely consider an alternative- fueled vehicle say they would not be willing to pay a penny more for a vehicle that runs on an alternative fuel over a traditional, gasoline-powered version of the same vehicle. Among those who are willing to pay extra, the average amount willing to be paid is $9,258. Some interesting differences emerge when examining the data by region, gender and income.
-- On average, those in the South ($10,786 extra) are willing to pay more
for an alternative-fueled vehicle than those in the West ($9,343
extra), Midwest ($8,648 extra) or Northeast ($7,418 extra).
-- Women are willing to pay $11,274 more on average for a vehicle that
runs on alternative fuel, compared to men who are willing to pay $7,506
more on average.
-- On average, those with incomes of $50K to $74.9K are willing to pay
more than those making less or more than them for an alternative-fueled
vehicle ($10,376 extra for those making $50K to $74.9K compared to
$7,484 extra for those making less than $35K, $8,501 extra for those
making $35K to $49.9K, and $8,594 extra for those making $75K or more).
Reasons for choosing alternative-fueled vehicles
Among those who say they would seriously consider a vehicle that runs on alternative fuel, almost half (47%) say their main reason for doing this is because it is better for the environment. Another 45 percent say their main motive is because their fuel costs will be lower. Substantially fewer adults cite the fact that they can take advantage of the Federal Clean-Fuel Tax Deduction (3%) and that they will be able to drive in High Occupancy Vehicle (H.O.V.) and carpool lanes (1%) as their most important reason. Some interesting demographic differences exist:
-- Those in the Northeast (54%) and Midwest (55%) are most likely to cite
fuel costs as their main reason for considering a vehicle that runs on
alternative fuel, while those in the West are most likely to cite
environmental concerns (64%).
-- Women are almost twice as likely as men to cite environmental concerns
as their main reason for consideration (62% and 34%, respectively),
while over half (52%) of men cite fuel costs for their main reason
compared to 36 percent of women.
Scott Upham, Senior Vice President of the Automotive and Transportation Research Practice at Harris Interactive comments, "We've seen that more and more U.S. consumers are realizing that alternative-fueled vehicles bear a price increase over similarly equipped gasoline-based vehicles, but that many are willing to make this choice due to their own environmental beliefs or sensitivity to high fuel prices."
Purchase plans and important factors for acquiring a new vehicle
A majority of adults (61%) who plan on purchasing a new vehicle most likely plan to acquire it through financing or leasing over several years. Those ages 55 and older are least likely (48%) to say they will finance or lease their next new vehicle; however, they are more apt than any other age group to say they would pay cash for the entire vehicle cost (34%). For those planning to finance or lease their next new vehicle, the most important financial factor for them is the Annual Percentage Rate (APR) (30%), followed closely by the down payment requirements (25%). Other important financial factors include the length of contract (13%), rebates or incentives offered at time of sale (11%), the lowest initial purchase price (10%), and the highest residual value or resale value (6%).
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