New figures show rising fuel prices are forcing motorists to downsize

April 6, 2006

More than 10% of Australian motorists have traded in their four-wheel-drive or large eight and six-cylinder vehicles in an effort to reduce growing fuel costs, according to figures released today by insurance provider Budget Direct.

The independent online survey of more than 22,000 respondents asked whether they had considered or if they had changed their vehicle for a more fuel-efficient model, to which nearly 50% (47.5%) said they had considered the option.

Budget Direct CEO Michael Weston said he was not surprised by the figures, given the continued surge in fuel prices over the past two years.

"There are certain segments of the Australian population, namely high income earners, who will be largely unaffected by fuel price increases, but for the average Australian, it's forced a serious re-think of their car maintenance preferences," Mr Weston said.

"Manufacturers of four-wheel drives as well as eight and six-cylinder vehicles are certainly starting to see the ever-increasing negative effects of rising fuel prices, with 2.6% of survey respondents telling us they had already traded their four-wheel drives for more fuel-efficient cars, and 7.5% of eight and six-cylinder drivers doing the same."

Official figures released in early March by The Federal Chamber of Automotive Industries (FCAI) showed a 9% decline in sales of Sport Utility Vehicles (SUV) throughout February, compared to the corresponding February 2005 period.

Mr Weston said this trend had seen car owners offsetting rising fuel costs by purchasing a small car to ensure they can maintain their car usage.

"We also asked respondents whether or not the rising fuel prices affected their car usage, to which 48% said no. However, just over 40% said they had been using their car less often…these respondents could be part of the 47.5% of car owners who are on the verge of downsizing," he said.

About Budget Direct

Budget Direct is part of the international Budget Insurance group insurance group that administers more than 3 million policies and $1 billion in premium income. In Australia, the company's call centres currently issue more than 4,000 policies to Australians every week, offering customers security and long-term protection.

For further information or interviews please contact Jonathan Kerr, Director, Marketing & Digital, Budget Direct (Auto & General) at 07 3377 8801 or

Budget Direct was established as an insurance provider in Australia in 2000.  It is part of the international BHL Group of companies headquartered in the British Isles. The group provides more than 6.8 million policies to insurance customers and administers $2 billion in premiums annually. Budget Direct offers Motor, Home & Contents, Health, Life and Travel Insurance as well as Roadside Assistance.