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Small, Fuel-Efficient Used Car Prices On The Way Up?

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The laws of supply and demand are set to do their thing in the next few weeks. Fueled by rising gas prices, short supply and rising demand, the price of used fuel-efficient vehicles is set to rise.

Jonathan Banks at NADA Used Car Guide has predicted that prices will approach record highs over the next few weeks, according to Automotive News.

"We're pretty close... It wouldn't take much, but my expectation is that if it does [set a record, it will happen] over the next four or five months."

Prices have already been rising this year, with compact and mid-size vehicles increasing by an average of $300 from March to April, and $500 since the start of the year.

Several factors play a part, including the supply of vehicles less than 5 years old being 14 percent lower than it was in 2009. That means short supply of the most popular vehicles--clean, late-model vehicles under six years old, with reasonable mileage.

Normally, prices peak in March and decline thereafter, but those supply problems will keep used values high until May, with a slow decline from June.

A similar price peak occurred last year, with prices remaining high until July. That was caused by short supply of new cars, stemming from the Japanese earthquake disaster.

It all results in the same situation we reported on last month: Poorer value for used car buyers, but more resale value for those looking to sell.

Our advice? If you're looking to buy a used green or small car, hang on until the second half of the year, and wait for values to fall a little.

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  1. An idiot is someone who does the same thing over and over, but expect different results. "If you price your product out of consumers reach, they will not buy it." Greed and stupidity always leads to poverty and bankruptcy. Why is that so difficult for automakers and sellers of autos to understand? They get a stupid idea in their heads and hell or high water can't change it even when they see themselves sinking to the bottom of the lake.
     
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