Increasing Demand for Smaller Cars

With gas prices increasing, more and more people are becoming convinced that smaller, lighter and slightly more economical cars are ther way to go.

Hence, smaller sedans have suddenly become a hot item. In addition, less powerful SUVs and Crossovers are becoming the more popular cars of choice for those who need to consider a large family.

If everyone had the money, getting hybrids would be a better option to cope against pocket heavy fuel prices.

But with the economic recession, most people also have to consider the initial cost of a car. That is why buying sedans, SUVs with smaller engines or crossovers become the best compromise.

This new trend has caused a demand spike for such cars. It could be said that no one in the auto industry could have predicted a drastic shift in demand for smaller cars. But thanks to the ever increasing oil prices, everyone it seems are considering economy above everything else.

So now, auto makers are bumping up production in significant levels to cope with the record breaking demands for smaller vehicles.

This sudden demand for smaller lighter vehicles however also has a drawback. For one thing, increased production for a commodity entails increase in cost. And since smaller lower end sedans don't really offer much of a profit for car manufacturers compared to premium models that offer all sorts of extras and luxury, buyers could lose some bargaining power.

For smaller vehicles, it would be difficult to negotiate for a significantly lower price compared to the sticker price. For most dealers, the difference from the invoice and the sticker price isn't that much to begin with. This means that a buyer wouldn't have that much room to haggle.

But then again, buying smaller vehicles is more of a long term strategy since smaller vehicles, being more fuel efficient, entails less cost when in use. Settling for the sticker price (or at least a price a little less than the sticker price) could be a small price to pay for a car not that fuel thirsty.