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Gas Prices Down, SUV Sales Up

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Gas Prices Down, SUV Sales Up

Economy

Gas Prices Down, SUV Sales Up

Gas Prices Down, SUV Sales Up

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SUV sales seemed doomed by high gas prices. But as prices at the pump drop, customers are returning to the big vehicles that — just a few months ago — they wouldn't look at.

STEVE INSKEEP, host:

Now, one consumer market that's been hit hard, of course, is car sales. And dealers selling SUVs got clobbered when gas hit $4 per gallon. Now, with fuel prices plunging and dealers offering huge incentives, bigger vehicles are showing signs of life. NPR's Frank Langfitt reports.

FRANK LANGFITT: Typically, SUVs and trucks made up 75 percent of sales at Porter Chevrolet. High gas prices changed all that at the Delaware dealership and for awhile, cars ruled. But with gas now down below $2, big vehicles are back on top. Sales manager Erik Sunstrom recalls a recent purchase by a father of four.

Mr. ERIK SUNSTROM (Vehicle Sales Manager): Well, we had a guy who came out of an old Malibu, it was an '05 Malibu, and he just purchased a Suburban. He felt with the rebates and incentives right now, plus gas prices, that it wouldn't be a bad move for him.

LANGFITT: Would you have been able to sell that guy a Suburban in July?

Mr. SUNSTROM: No. Not even close.

LANGFITT: Paul Taylor is chief economist with the National Auto Dealers Association. He says what's happening at Porter Chevy is reflected across the country. Taylor says when gas was at $4 a gallon, people avoided SUVs because they were afraid prices were headed even higher.

Mr. PAUL TAYLOR (Chief Economist, National Automobile Dealers Association): What they see currently is probably gasoline that they think will be somewhere in the range of a $1.50 to 2.50 or so. That's dramatically different from thinking they were going to get 5 or $6 gasoline.

LANGFITT: And so, as price fears have subsided, Taylor says consumers are warming again to bigger vehicles that just months ago, they wouldn't even look at. Frank Langfitt, NPR News, Washington.

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