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KBB: Don't Rush Out and Buy a Fuel-Efficient New Car

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author photo by Jeffrey Archer February 2012
  • A new car may not save enough to justify its expense.
  • Most consumers will only spend slightly more if gas prices increase.
  • Prices for fuel-efficient cars go up when gas prices are high.

Although gas prices are on the rise, Kelley Blue Book is warning car shoppers that buying a new, more efficient car may not be worth it - even if it's replacing an old gas-guzzler. The automotive analytics firm cautions consumers that despite rising gas prices that could soon surpass $4 per gallon on average, most new cars won't save enough in fuel costs to justify their added expense.

To illustrate its point, Kelley Blue Book considers a consumer who drives an average of 12,000 miles per year in a vehicle that achieves 20 miles per gallon. KBB points out that even if gas prices increase to the extreme level of $4.60 per gallon, that consumer's fuel expenses would only rise by $11.50 per week - hardly enough to justify a new vehicle and an accompanying car payment for many motorists whose older, less efficient vehicle is paid off.

"While in today's economic environment many families are on an extremely tight budget and $11.50 per week may be enough to break the bank, for others, it would be a small lifestyle change, such as bringing a sandwich to work rather than going out to lunch, or perhaps cutting back on Starbucks," said Alec Gutierrez, Kelley Blue Book's senior market analyst of automotive insights.

Kelley Blue Book also notes that as gas prices continue to rise, consumers shouldn't expect to find a great deal on a fuel-efficient new car. According to KBB, fuel price increases in 2008 and 2011 caused consumers to flock to compact cars, increasing their market share by up to 3 percent and keeping prices firm. Shoppers looking for used cars during the same period saw an even more difficult market, with values for hybrids and fuel efficient compacts jumping by more than 20 percent as gas prices peaked.

Nonetheless, Kelley Blue Book recommends several options to consumers looking for fuel-efficient small cars on a budget. According to KBB, shoppers interested in an efficient midsize car for under $30,000 should check out the new Toyota Camry Hybrid, which tops 40 miles per gallon on the highway, or the redesigned Chevrolet Malibu Eco, which achieves a similarly enticing 38-mpg. For consumers on an even more restrictive budget, KBB recommends the Ford Fiesta and Hyundai Accent, which offer attractive starting prices of around $15,000 and miserly fuel economy ratings of around 40 miles per gallon in highway driving.

What it means to you: Although a fuel-efficient new car might be tempting, we think Kelley Blue Book's advice to weigh your options before making a purchase has considerable merit.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
KBB: Don't Rush Out and Buy a Fuel-Efficient New Car - Autotrader