As vehicle buyers move to purchase SUVs and crossovers, increasing gas prices have led to record prices for used sedans and hatchbacks, Edmunds reports.
In the first quarter of 2018, the average transaction price for a used vehicle in the United States was $19,657, a 2.2 per cent increase over the first quarter of 2017. This figure is also a massive 18 per cent increase from five years ago.
“Used-car shoppers are typically more price-sensitive to changes in the market, but this is the first time in years that we’re seeing renewed demand for smaller vehicles,” senior manager of industry analysis at Edmunds, Ivan Drury said.
“With rising fuel costs breathing fresh air into this segment, subcompact and compact cars are finally retaining value again.”
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As gas prices continue to rise, prices for 3-year-old compact cars have jumped by 3.9 per cent in the first quarter. Similarly, prices for 3-year-old subcompact cars have risen by 3 per cent.
Interestingly, rising gas prices have yet to result in a drop in residual values for SUVs and trucks. According to the report, this is because SUV buyers are willing the deal with the added fuel costs.
“[There’s] an abundance of shoppers who still place enough value on increased cargo capacity, ride height, and other SUV and truck features to bear the costs of lower fuel economy and higher price tags,” the publication said.
However, analysts note that if gas prices jump beyond $4-a-gallon, resale values of SUVs and trucks could suffer.