Values Dip for High-MPG Used Cars
It was bound to happen sometime, and according to Kelley Blue Book, it finally has: prices for fuel-efficient used cars have fallen. The automotive analytics and pricing firm reported that after 20 weeks of consecutive gains totaling nearly 25 percent, fuel-efficient used car values have peaked, finally slipping in response to falling gas prices.
Kelley Blue Book says that for the first time since January, its analysts have finally seen values for subcompact, compact, and hybrid cars begin to decline. That matches up with gas prices, which rose rapidly throughout the spring to peak at a national average of $3.98 per gallon in May, only to decline to around $3.71 per gallon now – and KBB projects the trend will continue.
"Our advice to dealers and consumers is to shop with caution today, since values are likely to fall through the early part of the summer," said Alec Gutierrez, Kelley Blue Book's manager of vehicle valuation. "If possible, it would be best to hold off on purchasing a fuel-efficient vehicle until after summer, when values should be more stable."
According to Kelley Blue Book, fuel efficient cars will see values slip an additional 3 to 5 percent through the summer if Saudi Arabia goes forward with recently-announced plans to break rank from the Organization of the Petroleum Exporting Countries (OPEC) and increase crude oil production. Such a step will continue driving gas prices down, lessening demand for fuel-efficient used cars.
"Regardless of where these used-vehicle values end up, fuel-efficient vehicles will remain a smart purchase for budget-conscious consumers," said Gutierrez.
Indeed, while values for fuel-efficient used cars may be dropping, consumer demand is still strong. According to last month's Trend Engine Report showing search activity on AutoTrader.com, interest in fuel-efficient cars was extremely high, with searches for high-mileage cars like the Ford Fiesta and Focus, Hyundai Sonata and Kia Optima increasing while search volume decreased for popular trucks and SUVs.