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Gas Prices Fueling Price Spike On High-Mileage Hybrids, Small Cars

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Gas At $4.89

Gas At $4.89

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Gasoline prices are on the rise. And as surely as we can say that more Americans will start putting half-tanks into their cars and complaining loudly about the extra $20 or so a month they'll need to shell out—and schemes like drilling into fuel tanks emerge—let the rush on small cars resume.

According to GasBuddy.com, the U.S. average retail price is about $3.53—that's up nearly 40 cents from a month ago—and they've already climbed nearly 35 cents in March due to the political turmoil.

And in this almost farcical, yet predictable turn—yes, it does seem that U.S. motorists have a very short-sighted take on the energy market—small cars and hybrids are suddenly looking like the stars of the showroom again. Even though hundreds or thousands might be lost in the trade.

It's a trend that's already being noted by the National Automobile Dealers Association (NADA) and its NADA Used Car Guide. According to them, auction prices for used vehicles are up one to 3.7 percent during February, with compact cars up the most overall—about 3.1 percent on average—and SUVs among those with the smallest gains. For compacts, that's a huge jump in a single month, and an indicator that used-car shoppers are scrambling for more fuel-efficient cars. And in price-pinching cases such as this, it's likely some major changes in the new-car market aren't too far behind.

Civic, Prius prices spike

According to NADA, citing AuctionNet used-car sales data, some small cars (like the Honda Civic and Chevrolet Cobalt, they cite) are poised for increases of up to six percent in March as truck prices have stabilized at a time of year when they would normally rise somewhat.

They're also seeing prices rise for used hybrids such as the Toyota Prius. Prices on the Prius have settled a couple of years, yet so far this year they've risen again, with cars at auction earning about $1,700 more through February, compared to November 2010. NADA points to a price spike just over the past week.

"Because of the recent spike in fuel prices, values for used compact and mid-size cars are increasing dramatically compared to the rest of the market," said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide. And with production disruptions in Japan, from the recent earthquake-and-tsunami disaster, Banks expects that prices for compact and mid-size cars will keep rising.

Not an about-face, like 2008

But even with those factors, Banks doesn't think that prices will swing quite as dramatically as they did in 2008. "Barring an extreme increase in gas prices driven by a potential domino effect in other Middle East and North African countries, it's unlikely that used-vehicle prices will experience the extreme volatility seen in 2008," he said.

We've seen with past price upswings that it's volatility, not the prices themselves, that scare shoppers into other types of vehicles. Last year prices continued a gradual rise, but there was never a rapid price spike like this and consumers remained largely attached to larger vehicles. While prices remain far below the $4.13 national average they reached in June 2008, the price swing of recent weeks might have been enough to scare drivers back to the showroom.

What would it take to get you to seriously think about downsizing or moving to a more fuel-efficient vehicle?

[NADA]

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Comments (8)
  1. Why aren't diesel cars mentioned when the subject of increasing your fuel mileage, only hybrids? The VW TDI can give any of the hybrids a run for their money when it comes to mileage and the cost less than most hybrids. It is almost as if the word diesel has been removed from the American jounalists dictionary. They need to wake up and smell the diesel fuel.
     
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  2. Why aren't diesel cars mentioned when the subject of increasing your fuel mileage, only hybrids? The VW TDI can give any of the hybrids a run for their money when it comes to mileage and the cost less than most hybrids. It is almost as if the word diesel has been removed from the American jounalists dictionary. They need to wake up and smell the diesel fuel.
     
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  3. Another "knee jerk reaction" from the GP.
     
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  4. I agree with Bill. For same price as Prius you can get a TDI Golf that is actually made in Germany. It even has a 6 speed manual and goes around corners! However, as diesel is more expensive than gas, they would just likely go for something that burns gas. Most people don’t know that diesel fuel contains more energy per given quantity. Then there is the other important consideration – the diesel can be hot rodded!
    The high gas prices make me smile each time I ride by bicycle to work. (Yes, it is possible to ride to work in Southern California.) I just have to what out for those dam Priuses as they don’t make much noise when they go by.
    Didn’t Honda make a Civic HX coupe that got 50mpg about 12 years ago? I don’t recall it having batteries.
     
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  5. Yes Gabor they did and so did Chevy 20 years ago. My sister had a Chevy Sprint that routinely got over 45mpg and it occassionally got over 50. It's twin the Geo Metro did too. Sure the 3cyl motor wasn't a powerhouse but it did 70mph and cost around $7500. Funny how Chevy forgot how to make a car that gets anywhere near that mpg today.
     
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  6. @GR, Weight and safety are really the difference between then and now. The Sprint you're referring to weighed around 1,500 pounds; today's average vehicle weighs nearly 3,500 pounds, and even many compacts hit 3,000 pounds. However the 2011 Cruze Eco's 42-mpg EPA rating, for a car of nearly that weight, is all the more impressive when you consider its protection...
     
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  7. Why aren't natural gas cars being mentioned? The USA has plenty of natural gas at far cheaper prices than gasoline. The European car market sells 16% of all cars as natural gas (including American brands). All gas stations have nutural gas, diesel, and regular gas selections. Almost half of all car sales in Europe are diesel. In America, only the Honda Civic can be bought as a natural gas vehicle. See: http://www.boston.com/cars/news/articles/2008/05/23/is_us_overlooking_fuel_alternative/
     
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  8. Why aren't natural gas cars being mentioned? The USA has plenty of natural gas at far cheaper prices than gasoline. The European car market sells 16% of all cars as natural gas (including American brands). All gas stations have nutural gas, diesel, and regular gas selections. Almost half of all car sales in Europe are diesel. In America, only the Honda Civic can be bought as a natural gas vehicle.
     
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