As gas prices continue to rise, it is not surprising that many drivers are downsizing to a used compact or going green with a pre-owned hybrid. That trend is driving up the cost of used compact and hybrid cars on the market, according to Kelley Blue Book.
Values spike in last week of February
KBB said Monday that there was a huge spike in the price of used compact and hybrids sold at auction during the last week of February. The average cost of a used compact car at auction went up only 0.4 percent during the first weeks of the month, but the number shot up by 1.3 percent over the the week that ended March 2. The value of used hybrids on the auction block jumped 3.6 percent in the same week.
Reaction to gas prices, KBB says
The KBB report suggests that the spike in the car values coincided with pump costs across the nation approaching the $4 a gallon level.
Automotive industry standard
KBB is the industry standard for determining used car values. The Blue Book Market Report is a monthly assessment of the automotive industry gleaned from the activity of car auctions across the nation. These auctions are the primary source of inventory for used car dealerships.
Alec Gutierrez, an analyst at Kelley Blue Book, said:
“Dealers have been aggressively bidding on fuel-efficient vehicles at auction as consumer demand increases in response to rising gas prices. If the past is any indication of things to come, Kelley Blue Book could see values of used fuel-efficient vehicles increase more than 20 percent during the course of the next few months.”
The value of used compact and hybrid cars rose buy 20 percent during 2011.
Prius sees highest markups
According to the report, the 2010 Toyota Prius saw the greatest increase in value. During the month of February, its average price went up by $1,370.
Continued rise in values expected
Gutierrez concluded that, as in the past, the cost of fuel-efficient used cars will remain high until gas prices begin to dip. He suggested that used car dealers stock up on fuel-conserving models now. It is expected that their cost will continue to rise in the months to come.
Affects new car sales as well
Fuel costs are also a factor in the sales of new fuel-efficient models. Toyota started selling its new Prius c sub-compact hybrid on March 12. The timing was fortuitous for the automaker. In three days, Toyota moved 1,200 units.