Rising gasoline prices are creating fierce competition among dealers for fuel-efficient used vehicles at auctions, some dealers report. But analysts who monitor used-vehicle prices across the industry say neither prices of large trucks nor forecast residual values are tumbling -- yet.
Todd Caputo, owner of Sun Chevrolet and three used-car stores near Syracuse, N.Y., describes the jockeying to snap up hybrids and four-cylinder vehicles at an auction last week as "almost like a panic."
He saw a 2008 Chevrolet HHR with a four-cylinder engine and 35,000 miles on the odometer go for more than $11,000, rather than the $8,000 to $8,500 he expected. "They're good on gas, but not fantastic; but it's a small car with a four-cylinder engine," he said. "People are going crazy over them."
Jonathan Banks, senior director of editorial and data services at NADA Used Car Guide, says his data show that demand and selling prices for hybrids and fuel-efficient vehicles are rising. As a result, he expects the prices in the compact and mid-sized car segments will increase 3 to 4 percent in the April guide.
Prices of used large trucks have softened but are not expected to nose-dive as they did in 2008 when fuel prices spiked. Their prices are holding up, Banks says, due to the relatively small number of those vehicles in the used market. The supply of used large SUVs is down 35 percent and that of used large pickups is down 22 percent from 2008.
Anticipating that gasoline prices will rise from an average of around $3.50 a gallon late last week to up to $3.70 a gallon in April, Banks expects large pickup and SUV prices to drop 2 to 3 percent in the April guide.
Eric Ibara, director of residual consulting at Kelley Blue Book, says Kelley is not changing its residual value forecast based on the fuel-price spike. He says given the fragile economy, Kelley believes that even if the price of gasoline rises to $4.50 to $5 a gallon, it will not remain there for three years, the typical lease length.