As gas costs climb, some car prices to soar
2011 Toyota Prius / Josh Miller
(MoneyWatch) Prices for high-MPG compact cars and hybrids have begun rising in response to higher gas prices and could increase by as much as 20 percent over the next few months, according to analysts at Kelley Blue Book.
With national average gas prices at $3.84 a gallon according to the AAA Fuel Gauge Report, consumer demand has begun pushing up the prices of fuel-efficient used cars. Pump prices for regular already average more than $4 a gallon in California, New York, Illinois and several other states. Forecasters see the national average gas price reaching $4.25 by the end of April, eclipsing the previous high mark of $4.11 in 2008.
The latest increases have reversed lagging prices for used hybrids and compacts. In the last week in February, hybrid car auction values were up by 3.6 percent and compact cars by 1.3 percent. Used values for the Toyota Prius, the best-known and biggest-selling hybrid, increased $1,370 overall in the month of February.
"Dealers have been aggressively bidding on fuel-efficient vehicles at auction as consumer demand increases," says Alec Gutierrez, senior market analyst for Kelley Blue Book and its website kbb.com "If the past is any indication, values of used fuel-efficient vehicles could increase by more than 20 percent over the course of the next few months."
Matching last year's run
Last year as gas prices hit $4 a gallon, high-MPG used cars hit record levels, also led by big increases for the Toyota Prius. But if the pattern of gasoline prices also matches last year, with lower levels after early summer, prices fuel-efficient used cars will also retreat again.
Of course, the wild card this year is potential conflict with Iran. If an incident there disrupts world oil supplies, crude oil and gasoline prices could soar.
The bottom line for used car shoppers: If you don't have to buy a car right now, wait and see what happens. You might get a high-MPG car later at a much better price.
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