Used Hybrid Car Prices Down
Thursday, March 19th, 2009What were you doing last summer when gas prices skyrocketed over four bucks a gallon? Did you walk more? Take the bus? Carpool? Did you ditch that big Hummer or Suburban in favor of a smaller, more fuel efficient car? Did you take it one step further and buy a hybrid like the Toyota Prius or the Honda Insight? If you agreed to that last one, you’re not alone. Apparently a lot of people went in that direction, and now that gas has evened out to around two bucks a gallon, this is causing problems on both the new and the resale side of the automobile business.
Last summer, the demand for hybrids was so high that in some instances, buyers were willing to pay new car prices for used hybrids. The production couldn’t keep up on new, and most dealerships were able to sell the hybrids that came in at well over MSRP.
Once America’s appetite for big gas-guzzling vehicles returned with the low gas prices, hybrids went out of vogue. According to Kelly Blue Book, the used car values on hybrids are down nearly 24% from where it was last year. This is a strange anomaly where used car values overall have been climbing.
Hybrid vehicles traditionally cost about $3,000 more than a similar non-hybrid. When gas was $4 a gallon, a consumer could have expected to recoup that extra three grand in gas savings in about three years. When gas prices fell to $2 a gallon, that same $3,000 extra could take almost ten years to recover. With consumer’s minds focused on the recession, most are not looking to the big picture, but for what it costs to buy now. Overall, the hybrid will still save money, but that idea is lost in the fact that the hybrid price is so much more expensive than a standard vehicle.
New car lots now have a glut of hybrids, and used car lots are experiencing the same problem. Last summer, the resale lots couldn’t get its hands on a hybrid; now it may very well refuse one on trade because it already has a surplus in inventory.
This surplus is a good thing for consumers. When the economy recovers, so will gas prices, and eventually two-bucks-a-gallon-gasoline will be a fondly remembered thing of the pass. For those that have been thinking about a hybrid, there’s no better time to buy, whether it be new or used. New cars no longer go for MSRP and above, and it shouldn’t be too hard to find a gently used one at a decent price. Consumers that have traded in their hybrids for a pickup will eventually be feeling the pinch again, while those that buy the hybrids now will be cruising right past the gas pumps.
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