Gas prices are high, and chances are good that they're going higher. That news isn't just important for your daily commute: for used car shoppers, it affects the prices of vehicles you're considering, and for used car sellers, it impacts the value of your current ride.
According to AAA, today's average price for a gallon of gas is $3.758. That's a tad lower than yesterday's average of $3.761, but well above where we were just one month ago: $3.480.
Gas prices tend to soar as we approach the warmer months due to increased consumer demand and the more expensive mix used in summer gasoline. And even though the U.S. is now a net gas exporter, pump prices have been on the rise, thanks in part to some saber-rattling from Iran and fears of another war in the oil-rich region.
Many critics expect this year's gas prices to peak near $5 a gallon (in fact, they're already approaching that in certain parts of the country). Other critics are a bit more sanguine, predicting a nationwide average of $4 per gallon -- though depending on how things play out in the Middle East, the price could go much higher.
The higher those prices go, the pricier that fuel-efficient used cars will become. The National Automobile Dealers Association has just published some estimates on gas prices and how they might affect used car values, based on gas costing $4, $4.50, and $5 per gallon.
At $4 per gallon -- about 25 cents higher than gas is now -- compact cars like the Ford Focus would increase in value around 1.7%. At $4.50, the value would jump about 6%. And at $5 per gallon, compact cars would see a boost of 10.4%.
Not surprisingly, large SUVs would be the hardest hit by surging gas prices. At $4 per gallon, rides like the Toyota Sequoia would lose about 1.6% of their value. At $4.50, they'd drop 8.9%. And put down that cup of Texas tea, because at $5 a gallon, the value of large SUVs could plummet a staggering 22%.
Bottom line: if you're looking to buy a used car and you have your eye on a fuel-efficient model like the Toyota Prius, expect to pay more today than you ordinarily would. If you need to sell or trade in your compact car, though, this could be prime time.
On the other hand, if you need to purchase a big hauler like a large SUV or pickup, this might be a golden opportunity -- but not so much if you're looking to unload the one that's already sitting in your garage.