A Sign of The Times: Premium is Out of Fashion, We're "Trading Up" to Cheap

Here's an interesting retail phenomenon: Gas prices are competing with environmental issues and social networking for headline space theses days.  Consumers are cash strapped, but maybe they're willing to pay a premium to be cheap.  Case in point:

My husband travels to California regularly, and Hertz is his preferred car rental company. He typically places a reservation on their website a few days before his trip, usually for the least expensive car available.

Well, guess what Hertz's cheapest car is at the Burbank airport?    The Ford Expedition.  It has to be one of the largest cars they have. Certainly one of the least fuel efficient as well.  Hard to believe that it is actually cheaper to rent a full size SUV than an economy car.

So, we can assume that Hertz is making the car cheap to rent because no one's renting it.  But are people not renting it because a) the refueling charge will be high due to the fact that the the Expedition guzzles gas?  or is it because b) no one wants to be seen driving a car that is environmentally irresponsible?  Maybe both.  My husband says it's "b" (he passed up on the bargain and chose a smaller car to avoid being seen in the land yacht).

While this is a totally anecdotal incident, the irony hit me: At Hertz,  it's now actually cheap to rent something that should be expensive, possibly because the values associated with the expensive car have fallen out of fashion.....and even people who are feeling the impact of a tough economy are willing to "trade up" to a cheaper car.

Will we start seeing aspirational advertising about driving economy cars showing how sexy, smart and sophisticated we are for choosing the Hyundai or Ford Focus?  Will "economy" cars start to cost more than cars less fuel efficient, like they do at Hertz?

Unless premium products are in synch with the premium values of the customer, they won't get very good mileage, in more ways than one.