Survey Finds Pumped-Up Gas Prices Mean Driving Less, Vacationing Closer to Home and Doubling-up on Groceries

Business Wire, May 2, 2005

MAYFIELD VILLAGE, Ohio -- The Progressive Group of Insurance Companies Finds People's Appetite for Driving Drops as Gas Prices Rise

Pain at the gas pump has people looking for ways to cut costs, according to a recent countrywide online survey conducted by the third largest auto insurer in the country, the Progressive Group of Insurance Companies.

Last year, when prices topped $1.75 a gallon, half of all drivers surveyed by Progressive (50 percent) said they would change their driving habits as a result of rising gas prices. When the same question was posed this year as gas prices reached an all-time high of $2.22 a gallon, 14 percent more drivers (57 percent) said they'd change their driving habits. And the more gas prices rise, the more people are willing to change: 66 percent will change how they drive if prices reach $2.40 a gallon, and 78 percent will if prices reach $3 a gallon.

What will they do differently? According to this year's survey results, the majority say they will drive less often (52 percent) while others will drive shorter distances (24 percent). Some will cut down on driving to see family and friends (23 percent).

Also, the majority (61 percent) say higher gas prices will affect their summer vacation plans. For example, they will vacation closer to home (24 percent), cancel vacation plans altogether (14 percent), fly instead of drive (13 percent) or take short day trips instead of driving to a destination farther away (11 percent).

"It's intuitive, yet interesting, to see that the more gas prices climb, the more changes there are in people's driving behavior," said Robin Harbage, product development general manager, Progressive. "In fact, we saw higher percentages across most categories this year with gas at $2.22 a gallon versus last year when it was 'only' $1.75 a gallon."

The survey also found people are willing to change more than just their driving habits: Three out of four drivers (76 percent) plan to make lifestyle changes as a result of rising gas prices. The leading thing drivers say they will do is double-up on groceries in order to make fewer trips (47 percent), followed by talk on the phone rather than visit friends/family in person (41 percent) and watch more television or movies at home (40 percent).

Fifty-two (52) percent of all drivers say they'll pursue other money-saving options as a result of rising gas prices. To save money on transportation costs, drivers are four times more likely to buy a vehicle that gets better gas mileage (24 percent) and three times more likely to buy a cheaper grade of gas (20 percent) than to shop around for auto insurance (6 percent). And while it might not net much in savings, a whopping 93 percent of drivers say they would drive out of their way to save 20 cents a gallon on gas.

"Driving out of the way to save 20 cents a gallon is pretty extreme when you stop to think about how much money you're really saving," said Harbage. "Assuming you fill your 20-gallon tank about once a week and save 20 cents a gallon, in a six-month period you'll save $104. You could very easily save that much or more on a six-month auto insurance policy just by visiting an auto insurance Web site or an independent agent or broker, because rates can vary by hundreds of dollars among companies."

The Progressive Group of Insurance Companies, in business since 1937, ranks third in the nation for auto insurance based on premiums written and provides drivers with competitive rates and 24/7, in-person and online service. The products and services of the Progressive Direct Group of Insurance Companies are marketed directly to consumers by phone at 1-800-PROGRESSIVE and online at progressivedirect.com through the Progressive Direct(SM) brand. The Drive Group of Progressive Insurance Companies offers insurance through more than 30,000 independent insurance agencies that market their products and services through the Drive Insurance from Progressive(SM) brand. For more information, go to driveinsurance.com. The Common Shares of the Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. More information can be found at progressive.com.

Robin Harbage is available for interview.

Editor's note: 2004 Gas Prices Survey results available upon request.

Note to Editors: The accent over the 'e' in Cote in the contact information was omitted for transmission purposes.