- Jun 8, 2010
ALG predicts gas at $4.13 by 2013; residual values for compacts, hybrids to climb
2010 Toyota Prius – Click above for high-res image gallery
Though we are currently enjoying our gasoline at the bargain-basement price of only $2.72, it may not stay that way for long. According to Automotive Lease Guide (ALG), gas prices will hit a average of $4.13 by 2013. ALG predicts future gasoline prices to help determine vehicle residual values, which are partially calculated with fuel efficiency and gas prices in mind. As ALG chief economist Matt Traylen explains:
If gasoline prices top the $4 mark, we can expect to see demand increase for both mid-compacts and hybrids, coupled with a sharp decrease in desire for gargantuan luxury SUVs like the Cadillac Escalade, Lincoln Navigator and others. According to ALG, mid-compacts will see a 9.3 percent jump in residual value and a 29 percent increase in auction value, if gasoline hits the projected $4.13. Hybrids are expected to see similar gains as well. Rising prices will prove problematic for owners of large SUVs, though, which are expected to see a 7.4 percent drop in residual and 20 percent decrease in auction value, indicating that unloading one of those behemoths is probably gonna cost ya. We're not certain that gas will reach that mark, but let's not forget that it's come awful close before.Gasoline prices are a key driver of resale values at the segment level. Despite the recent drop in oil and gas prices, we are maintaining our long-term gas price forecast of over $4 per gallon in 2013.
[Source: Automotive Lease Guide (PDF)]