Kelly Blue Book: Fuel-efficient used vehicle values have peaked

June 14, 2011

June 14, 2011 — Values for fuel-efficient used vehicles have peaked, after increasing nearly 25 percent through 20 weeks of consecutive gains, according to a press release_notes issued Tuesday by Kelley Blue Book.

The majority of strength this year for fuel-efficient vehicles was driven by the rapid rise in gas prices, which peaked in May to a national average of $3.98 per gallon. The national average gas price has since declined to $3.71 per gallon, according to Kelly Blue Book.

Values for subcompact, compact and hybrid cars have started to decline for the first time since January in response to falling gas prices. Values for some of these vehicles have actually dipped into the red, according to Kelly Blue Book analysts.

On June 8, the Organization of the Petroleum Exporting Countries (OPEC) announced that crude oil production would be held constant. But on June 10, Saudi Arabia announced it would increase crude oil production to 10 million barrels per day—13 percent more than May.

If Saudi Arabia holds true to the production increase, Kelley Blue Book analysts expect used-car prices to drop an additional 3 to 5 percent through summer, and even more if national gas prices fall below $3.50 per gallon.

"Regardless of where these used-vehicle values end up, fuel-efficient vehicles will remain a smart purchase for budget-conscious consumers," said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book. "Our advice to dealers and consumers is to shop with caution today, since values are likely to fall through the early part of summer. If possible, it would be best to hold off on purchasing a fuel-efficient vehicle until after summer, when values should be more stable."

For more information, visit kbb.com/media/.

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