AGRR Magazine

Fuel Prices Not Crisis, New Reality

The $3 gallon of gas, and quite probably the $4 gallon of gas, is not a "fuel crisis," according to reports in the media, but the new reality of what driving costs for consumers.

For the auto glass replacement and repair industries, this translates into fewer miles driven and a reduction in the number of windshield that will be replaced or repaired. According to some estimates, increased fuel costs have resulted in a 3 percent reduction in the number of miles driven and a 1.8 percent reduction in the number of windshields replaced.

According to a report in The New York Times, Richard Curtin, director of a study at the University of Michigan, which measures consumer confidence, consumers had thought the gas price run-up would be temporary, but "they're coming to the conclusion that gas prices will be permanently high." And this will translate into fewer miles driven.

According to the Travel Industry Association, a third of all leisure travel takes place during the summer. This season, it projects, Americans will take 326 million trips, essentially equal to last year's 323 million trips. However, it also predicts that trips will be shorter and closer to home.

Another drive-less incentive which is receiving media attention is a reduction in vehicle insurance. recently confirmed that consumers who are driving less because of higher gas prices could be saving money on their insurance.
A recent analysis by the Consumer Federation of America (CFA) indicated that drivers could save an average of 5 to 10 percent on their auto insurance rates if they reduced their annual mileage.

Newspapers across the country have been carrying stories with interviews in which consumers explain how they have cut back on their driving due to gas prices. The Memorial Day weekend, the official start of summer, has been the occasion for the flurry of newspaper articles, but the change in driving habits seems to becoming more permanent as gas prices continue to climb or stay over $3 a gallon.

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