The Flip Side (Barclays)

Do High Gas Prices Change How Americans Buy Cars?

In this episode of The Flipside, Brad Rogoff and U.S. Autos and Mobility Analyst Dan Levy examine whether today’s elevated gas prices are reshaping American car‑buying habits. They note that fuel costs represent only about 3% of average household spending, but historically higher prices have nudged consumers away from fuel‑guzzling SUVs and pickups toward more efficient models, though the shift has been modest and often reversible. The discussion also highlights broader market dynamics: new‑car prices have surged to roughly $46,000 (up from $34,000 pre‑COVID), monthly loan payments have risen to about $770, and sales are increasingly dominated by higher‑income buyers, creating a K‑shaped affordability landscape. Finally, they explore why higher gas prices haven’t sparked a major EV surge in the U.S., citing entrenched preferences for larger vehicles, limited affordable EV options, and policy gaps, while also touching on the emerging role of autonomous ride‑hailing as a potential alternative.