Used fuel-efficient compact cars increase 30 percent in value
Cross-posted from Climate Progress.
So your home is worth half of what it used to be, the stock market makes you jittery, and gold is far too expensive to buy. Don’t fret! There may still be something tangible in your life gaining value: your used, fuel-efficient car.
Yes, experience says that an automobile is not an asset — most start declining in value as soon they’re driven off the lot. But with new demand for fuel-efficient automobiles, used “gas-sipping” cars are actually worth 30 percent more than they were six months ago, reports The New York Times:
Used cars over all are retaining a higher percentage of their original value than ever before, according to auto analysts who track prices. Compact cars that are one to five years old are worth, on average, about 30 percent more on the wholesale market now than just six months ago, the National Auto Auction Association reports.
“You’re not going to find a better return than that on anything,” said Jonathan Banks, executive auto analyst for the used-car guide published by the National Automobile Dealers Association.
Here are some specifics:
The value, for example, of a 2008 Honda Civic LX (highway mileage: 34 miles per gallon) has increased by $2,098 since January, and the value of a 2010 Chevrolet Aveo LS (highway mileage: 35 m.p.g.) by $3,448. A three-year-old Ford Focus (highway mileage: 35 m.p.g.) is worth about two-thirds of its original sticker price, according to Kelley Blue Book, another widely used vehicle valuation source; in 2009, a three-year-old Focus retained just a third of its original value, a difference of more than $5,000. A year-old Prius actually can command about as much as the list price of a new Prius because the new ones are in such short supply that many dealers are selling them for several thousand dollars more than the sticker price.
At the same time, full-sized SUVs and pickup trucks have declined more than $900 in value on average.
Why is this happening? As we wrote about earlier this month, manufacturers have a rising inventory of new gas-guzzling vehicles and a dwindling inventory of smaller vehicles, in large part due to the limited availability of parts from Japan after the earthquake. So consumers are turning to the used market. However, the dip in sales of new cars a couple years ago has limited the supply of used fuel-efficient cars.
We may be nearing a peak though. The NYT reports that used car values are expected to drop a bit throughout the rest of the year. Maybe it’s time to sell your car to an SUV-driver who needs it and buy that bike you’ve been eyeing?