Steeply rising gasoline prices have had little effect on the used auto market since most people are sticking with their current vehicle, according to the National Automobile Dealers Association. This is the opposite of what happened as recently as last year when gas prices rose.
In 2011, used-car prices increased significantly and light-truck prices decreased when gas prices rose from $3.07 a gallon in early January to a peak of $3.96 in May. However in the spring of 2012 gas prices once again skyrocketed toward a peak of $3.94 a gallon in April, but used-vehicle prices moderated with car price appreciation much less than the prior year. Light-truck prices also remained stable and actually increased moderately in some cases.
From April to July, the 3% average rate of depreciation for used compact and mid-size cars has led all other segments by a wide margin, while prices for mainstream light-truck segments have averaged a decline of 1.6%, according to the NADA Used Car Guide.
In dollar terms, the average price of a three-year-old compact car fell by $1,350 during this period. Hybrid car prices have taken an extreme hit since the spring. For example, prices for three-year-old compact hybrids, such as the Toyota Prius, fell by nearly 18% from April to July or $2,718. By comparison, prices for large pickup trucks, such as the Ford F150, declined by only $525.
In August, cars have continued to depreciate more than light trucks as gasoline price continue to rise. Compact and mid-size car prices fell by 2.2% and 2.0%, respectively, while prices for utility vehicles of all sizes and large pickup trucks barely slipped at an average of 0.5% compared to July. Prices for luxury cars and luxury utility vehicles prices fell by 1.8% and 1.5%, respectively, in August compared to July.
“The most recent jump in gas prices is largely responsible for slowing down the rate of depreciation for cars compared to the prior three months, but by historical standards the improvement has been mild,” said Jonathan Banks of NADA. “Even more notable is the continued price strength of light trucks in August. So far, higher gas prices have not had a noticeable impact on the demand for light-truck segments.”
