Alternative-Fueled Vehicles Seriously Considered by One-third of U.S. Adults Planning to Purchase or Lease a New Vehicle

Annual Percentage Rate (APR) seen as the most important financial factor when financing or leasing a new vehicle

ROCHESTER, N.Y. – April 24, 2006 – A recent Wall Street Journal Online/Harris Interactive Personal Finance Poll reveals that one-third (33%) of U.S. adults who plan to purchase or lease a new vehicle say they are most likely to seriously consider an alternative-fueled vehicle for their next purchase. Most (92%) of these adults are willing to pay more for it than a traditional, gasoline-powered version of the same vehicle. Top reasons for considering an alternative-fueled vehicle include concerns for the environment and the cost of fuel. The survey also explores how consumers plan to pay for their next new vehicle, and what financial factors are most important to them when making their next new vehicle purchase.

These are some of the results of an online survey of 2,516 U.S. adults conducted by Harris Interactive^® between April 4 and 6, 2006 for The Wall Street Journal Online’s Personal Journal Edition.

Almost three in five (58%) adults plan on purchasing a new vehicle, and while 37 percent say they are most likely to seriously consider a traditional, gas-fueled vehicle, many say they will seriously consider a hybrid (25%), ethanol-fueled (7%), or diesel-fueled (2%) vehicle. Those most likely to consider alternative-fueled vehicles include:

• Those who live in the West (38%)
• Young adults age 18 to 34 (36%)
• College graduates (44%)
• Those with an income of $75K or more (40%)

Only eight percent of adults who will likely consider an alternative-fueled vehicle say they would not be willing to pay a penny more for a vehicle that runs on an alternative fuel over a traditional, gasoline-powered version of the same vehicle. Among those who are willing to pay extra, the average amount willing to be paid is $9,258. Some interesting differences emerge when examining the data by region, gender and income.

• On average, those in the South ($10,786 extra) are willing to pay more for an alternative-fueled vehicle than those in the West ($9,343 extra), Midwest ($8,648 extra) or Northeast ($7,418 extra).
• Women are willing to pay $11,274 more on average for a vehicle that runs on alternative fuel, compared to men who are willing to pay $7,506 more on average.
• On average, those with incomes of $50K to $74.9K are willing to pay more than those making less or more than them for an alternative-fueled vehicle ($10,376 extra for those making $50K to $74.9K compared to $7,484 extra for those making less than $35K, $8,501 extra for those making $35K to $49.9K, and $8,594 extra for those making $75K or more).

Among those who say they would seriously consider a vehicle that runs on alternative fuel, almost half (47%) say their main reason for doing this is because it is better for the environment. Another 45 percent say their main motive is because their fuel costs will be lower. Substantially fewer adults cite the fact that they can take advantage of the Federal Clean-Fuel Tax Deduction (3%) and that they will be able to drive in High Occupancy Vehicle (H.O.V.) and carpool lanes (1%) as their most important reason. Some interesting demographic differences exist:

• Those in the Northeast (54%) and Midwest (55%) are most likely to cite fuel costs as their main reason for considering a vehicle that runs on alternative fuel, while those in the West are most likely to cite environmental concerns (64%).
• Women are almost twice as likely as men to cite environmental concerns as their main reason for consideration (62% and 34%, respectively), while over half (52%) of men cite fuel costs for their main reason compared to 36 percent of women.

Scott Upham, Senior Vice President of the Automotive and Transportation Research Practice at Harris Interactive comments, "We’ve seen that more and more U.S. consumers are realizing that alternative-fueled vehicles bear a price increase over similarly equipped gasoline-based vehicles, but that many are willing to make this choice due to their own environmental beliefs or sensitivity to high fuel prices."

A majority of adults (61%) who plan on purchasing a new vehicle most likely plan to acquire it through financing or leasing over several years. Those ages 55 and older are least likely (48%) to say they will finance or lease their next new vehicle; however, they are more apt than any other age group to say they would pay cash for the entire vehicle cost (34%). For those planning to finance or lease their next new vehicle, the most important financial factor for them is the Annual Percentage Rate (APR) (30%), followed closely by the down payment requirements (25%). Other important financial factors include the length of contract (13%), rebates or incentives offered at time of sale (11%), the lowest initial purchase price (10%), and the highest residual value or resale value (6%).

 Downloadable PDFs of The Wall Street Journal Online/Harris Interactive Personal Finance Polls are posted at http://www.harrisinteractive.com/news/newsletters_wsjfinance.asp.

Harris Interactive conducted the online within the United States between April 4 and 6, 2006 among 2,516 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

All surveys are subject to several sources of error. These include: sampling error (because only a sample of a population is interviewed); measurement error due to question wording and/or question order, deliberately or unintentionally inaccurate responses, nonresponse (including refusals), interviewer effects (when live interviewers are used) and weighting.

With one exception (sampling error) the magnitude of the errors that result cannot be estimated. There is, therefore, no way to calculate a finite "margin of error" for any survey and the use of these words should be avoided.

With pure probability samples, with 100 percent response rates, it is possible to calculate the probability that the sampling error (but not other sources of error) is not greater than some number. With a pure probability sample of 2,516 adults one could say with a 95 percent probability that the overall results would have a sampling error of +/- 3 percentage points. Sampling error for the various sub-samples shown in the tables would be higher and vary. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.

The Wall Street Journal Online/Harris Interactive Personal Finance Poll is an exclusive poll that is published in the Personal Journal Edition of The Wall Street Journal Online at www.wsj.com/personaljournal.

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About Harris Interactive^®
Harris Interactive Inc. (www.harrisinteractive.com), based in Rochester, New York, is the 13^th largest and the fastest-growing market research firm in the world, most widely known for The Harris Poll^® and for its pioneering leadership in the online market research industry. Long recognized by its clients for delivering insights that enable confident business decisions, the Company blends the science of innovative research with the art of strategic consulting to deliver knowledge that leads to measurable and enduring value.

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Jennifer Cummings

Harris Interactive

585-214-7720

Robert Christie

Dow Jones & Company

212-416-2636