Report: Gas Price Increases Can Lead to Huge Hits in SUV Resale Value

By Jacob Brown | July 21, 2011
It’s amazing the difference a dollar can make. For example, a new study by Auto Lease Guide says that a $1 increase in gas prices can jack up the value of an economy car by 10 percent, but lower it on premium full-size SUVs by as much as 13 percent. While it's not surprising that economical cars are in higher demand when gas prices go up, the study’s findings show the dramatic effect fuel costs have on small car and large SUV used car prices. Basing its estimates on the residual value of three-year-old vehicles, ALG said that a dollar increase in gas prices raises the resale price of smaller vehicles 10 percent higher than normal, while premium midsize SUVs, large SUVs, full-size pickups, vans, and premium large SUVs can all decrease in value by 10 percent or more.
However, most automotive segments stay more consistent in the face of fluctuating fuel costs. ALG reported that the resale values for compact SUVs and full-sized cars stay consistent no matter the price of gas, and most other segments fluctuate less than 5 percent. The findings are also counterintuitive in a way. If you need to tow or haul heavy loads, buying a large pickup truck or SUV while gas prices are high will help you get a better deal. Right now, gas prices are hovering around $3.65 for a gallon. ALG expects that number to stay consistent through the rest of 2011 and possibly increase to as much as $4.06 nationally by 2016 when the federal government mandates fleet fuel economy averages of 35.5 mpg. ALG noted that supply shortages and the overall health of the economy also influence used car prices. Still, if your heart is set on a Chevrolet Suburban or Ford Expedition, now looks like the perfect time to buy. Source: Automotive Lease Guide