For the first time since 2010, a barrel of crude oil dropped below almost 80 cents last week. Although this trend has already harmed the profitability of some oil firms, nowhere has the impact of cheaper oil been more apparent than in the American car market, where gasoline costs at least $4 per US gallon at the start of 2014. As of November 2014, drivers in much of the country are now paying less than $3, and in some states in the northeastern U.S., are paying less than $2.60.
This has resulted in a shift in buying patterns among American motorists over the past year. Since the financial crisis of 2007-08, smaller and greener cars, such as the Toyota Prius, a hybrid, had been rising in popularity. However, in recent months, industry statistics show that the sales of larger pickup trucks and sport-utility vehicles (SUVs) have been starting to rise again…the first time in almost a decade.
Most industry experts credit the plunge in fuel prices for this change, but will the trend continue?