Gas prices in the U.S. peaked in May, hitting $4 a gallon before slipping steadily to the current national average price of $3.71. KBB says that gas prices in the States will continue to decline throughout the summer and claims that if this prediction holds true, then the values of fuel-efficient used vehicles will fall by an additional three to five percent. So, it's not the ideal time to trade in a used gas-guzzler for a fuel-sipper, but it's certainly not the worst, either.
Hit the jump for KBB's presser and related fuel-efficient vehicle valuation graphic.
[Source: Kelley Blue Book | Photo: Getty Images/Photographer: Justin Sullivan]
Fuel-Efficient Used-Vehicle Values Have Reached Peak, According to Kelley Blue Book
Dealers and Consumers Should Shop with Caution as Oil Production Rises and Pump Prices Fall
IRVINE, Calif., June 14, 2011 /PRNewswire/ -- Kelley Blue Book's www.kbb.com, the leading provider of new car and used car information, today reports that after increasing close to 25 percent throughout 20 weeks of consecutive gains, values for fuel-efficient used vehicles have now peaked. For the first time since January, values for subcompact, compact and hybrid cars have started to decline in response to falling gas prices. In fact, Kelley Blue Book analysts currently see values for some of these vehicles dip into the red for the first time since January. The majority of strength this year has been driven by the rapid rise in gas prices, which peaked in May with a national average of $3.98, and since has declined steadily to $3.71 today.
On June 8, 2011, the Organization of the Petroleum Exporting Countries (OPEC) announced that crude oil production would be held constant; however, on June 10, 2011, Saudi Arabia broke rank announcing that it would increase crude oil production to 10 million barrels per day (13 percent more than May levels). This is a strong indication that gas prices will continue to fall through summer, bringing demand for fuel-efficient vehicles and their premium prices down with it. If Saudi Arabia holds true to its planned production increase, Kelley Blue Book analysts expect used-car prices to continue to slip an additional 3 to 5 percent through summer, and even more if gas prices fall below $3.50 per gallon, nationally.
"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 on the state of the automotive industry, visit http://mediaroom.kbb.com/blue-book-market-report/ for Kelley Blue Book's monthly Blue Book Market Report. The report also discusses developments in residual values and trends in monthly used-car shopper activity on kbb.com. If you would like to subscribe to the monthly Blue Book Market Report, please e-mail email@example.com.
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About Kelley Blue Book (www.kbb.com)
Founded in 1926, Kelley Blue Book, The Trusted Resource®, is the only vehicle valuation and information source trusted and relied upon by both consumers and the industry. Each week the company provides the most market-reflective values in the industry on its top-rated website www.kbb.com, including its famous Blue Book® Trade-In and Retail Values, and Fair Purchase Price, which reports what others are paying for new cars this week. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies, as well as governmental agencies. Kbb.com is a leading provider of new car prices, used car values, car reviews, new cars for sale, used cars for sale and car dealer locations. Kelley Blue Book Co., Inc., is a wholly owned subsidiary of AutoTrader.com.