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Gas prices reach the tipping point Add to ...

According to auto analyst Dennis DesRosiers, it looks like $1.30 a litre is the tipping point that drives Canadians to buy smaller cars.

When gas prices spiked in April, "subcompact and compact cars flew off dealers' lots," notes DesRosiers in a note to clients.

"With gas prices spiralling out of control in April, consumers came back to the smaller car and light-truck market in hordes," said DesRosiers. "If you don't think gas prices affect what vehicles consumers are buying, then think again."

The average price of gas across the country in April rose 7 per cent from the March level of $1.231 a litre - and that was 25 per cent higher than the $1.041 level of April, 2010, said DesRosiers. And in April, small car sales began to take off and have been strong every since.

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