Kelley Reports Price Drops for Fuel-Savers

A new announcement from Kelley Blue Book, a renowned auto valuation company that dealers, insurers and others rely on, suggests that fuel-efficient used car prices are responding to the lower gas prices we’ve seen in past weeks – KBB numbers show subcompacts, hybrids and other types of vehicles pricing lower, almost like clockwork.

With a cited “average industry” price decrease of .6% from May and .4% for the week (5/27-6/10), KBB shows corresponding decreases of 1.7% and .3% for hybrids, 1.4% and .3% for compact cars, and 1.2% and .1% for subcompacts. This comes along with news that, overriding previous reports from OPEC, the Saudis announced intentions to increase crude oil supply. Also, KBB documents recent price slumps at the pumps, with gas coming down about 20 cents in past weeks.

This news is sure to infuriate those dealers and others who champion the sale of fuel-efficient cars, who wonder at the fickle moods of American consumers and can’t understand why others don’t always favor energy efficiency on the road – but the plain fact is that gas prices drive auto sales and values, and this report is one prominent illustration of that principle. Analysts can expect more buyers to embrace thirstier vehicles when gas prices continue to drop, and by the same token, another price spike will see more car owners dumping their big trucks and SUVs and going with the tinier ride. A lot of this horse trading has already happened with the artificial government incentive commonly referred to as “cash for clunkers,” but there’s still a lot of room for pre-owned sales to go either way based on price changes for gasoline.

If you’re hunting for a new or replacement vehicle, you can use the KBB news of the “used car price peak” to your advantage. It’s always going to help you at the auto financing desk to know what your trade-in is worth, and if you are buying a certified pre-owned model, knowing about used car values can help you negotiate a fair sale price. Don’t go to the dealer’s lot without researching both current car pricing, as well as third party lending and your credit situation, to get low auto financing rates that will stand you in good stead while you’re mailing those monthly checks to your lien holder.