2011 Honda Insight
If you're thinking of downsizing or getting a vehicle that's more fuel-efficient, you're not the only one, unfortunately.
It's the timing that's unfortunate; hybrids and small cars are hot, and you're not bound to find as good of a deal on them as just a few months ago. As an analysis from the firm Baum & Associates shows, sales of hybrids, and diesels rose at nearly three times the rate of the market as a whole from March 2010 to March 2011. Those three vehicle categories were up 46 percent this March, while the overall market was up 17 percent—so sales of green cars are growing at nearly three times the rate of the market.
Even looking at the entire first quarter of this year, versus the same time last year, the same observations hold true: Sales of hybrids, diesels, and the smallest cars are growing faster than the market as a whole.
Contrary to what we've reported so far, the spike in sales of small cars appears to be much more than just hype this time around. Sales of what Baum classified as very small cars (like the Honda Fit and Ford Fiesta) grew 30 percent during that same period. And gas prices and small-car demand have been cause for consumers to reconsider less-popular hybrid models, like the 2011 Honda Insight.
Looking at three-year-old vehicles, small cars like the Toyota Corolla, Ford Focus, Honda Civic, Nissan Versa, and Chevrolet Cobalt have shown the strongest gains in value, while older SUV designs like the former Ford Explorer have not seen such upswings in demand. Earlier this month, Adesa, which is a major wholesales for used cars, also reported a 16-percent rise on prices of used four-cylinder vehicles.
Those trends, combined with earthquake-related supply issues, could prove the perfect storm to drive new-car prices on small, fuel-efficient models way up. And, it could provide a window of opportunity for Ford and GM, who this time are prepared with competitive offerings in that smallest category, like the 2011 Ford Fiesta and upcoming 2012 Chevrolet Sonic.
But for shoppers eyeing mileage figures, there's now plenty of competition. Hyundai, for instance, unveiled an all-new 2012 Hyundai Accent last week at the New York auto show. In all of its versions, it achieves 40 mpg on the highway—yet its base price is about half the typical Toyota Prius transaction price.
Looking at vehicle segments, small cars and small crossovers remain the areas of rapid growth, with their sales together growing at twice the rate of the market. Baum points out that traditional body-on-frame SUVs now amount to less than seven percent of the market.
Sales By Segment - March 2011 vs March 2010 - Baum & Associates
But the market is fickle. As trends have shown, it's not the price itself of gas, but the volatility, the rate, at which prices rise that gets more shoppers thinking about miles per gallon; and this spring, they've risen rapidly. If gas prices settle back down over time to, say $3 a gallon, would we be back to our old ways?