Used Hybrid Values Rise with Gas Prices

Four-dollar gasoline hasn’t just kept new trucks and SUVs on dealership lots. It’s also made it more difficult to unload used gas-guzzlers. Meanwhile, hybrids are quickly becoming the hottest vehicles in the used market.

“Gas prices and the impacts on the resale value are the number one issues we’re dealing with,” said James Clark, editorial director at Automotive Leasing Guide, in an interview with HybridCars.com. ALG monitors and forecasts trends in the residual values of cars and trucks. Hybrid cars were first introduced in the United States in late 1999—so the used hybrid market is still in its infancy, making it difficult to forecast long-term resale values for gas-electric vehicles.

Yet, the recent trends are revealing. “In the last month or two, we’ve seen values go up, ballpark, from around $15,000 for a 2005 model year Prius to around $17,000. That’s pretty significant for a used car price to increase that much in a short time.”

For Americans who are trying to get rid of their Tahoes and Explorers for the sake of better fuel economy, pricey gas means not only fewer buyers, but a glut of competition from other like-minded resellers. Unless you have limitless amounts of money to spend on gasoline, buying an SUV recently has proven to be a losing gamble on oil prices staying low. Depending on the make and model, it’s not uncommon for light trucks and SUVs to have lost more than $3,000 in resale value from what a similar vehicle with the same mileage would have been worth just last year. According to the Wall Street Journal, 36 percent of people who traded in their SUVs in May still owed more on the vehicle than it was worth.

Whether this price depreciation lasts depends on where gas prices go in the near future. Industry executives and analysts are not planning for the gas to drop back to 2002 levels, and don’t expect SUVs to regain their popularity – unless they are efficient hybrid SUVs.

“At both sides of the margins, vehicles with really good gas mileage or really poor gas mileage are both very difficult to forecast right now,” said Clark. “But if you’re doing your cost of ownership calculation—which more people are doing right now—the impacts are significant.”


  • Gandalf

    Why didn’t we see this happening years ago? We can’t blame energy speculation, we can blame energy ignorance and energy denial.

    This will continue until Detroit and our Government(?) stop dragging their feet on comprehensive energy efficiency and energy independence. They have put our country and its economy at grave risk.

    Comprehensive change is needed in Washington to enable us to wake up to the realities of the 21st century and to prepare us to be leaders in the new economies and technologies rather to be laggards.

    It should be obvious to all what this means for our upcoming national elections.

  • disco-bob

    we have been through this before and we did not learn our lesson(gas lines of the 70′s) blame it on good ‘ol american capitalism( why sell us a small efficient vehicle when they can make us buy a big bus at twice the price) at least in some foreign lands they get health care with their high gas prices,,,grumble,,grumble!!

  • JP Morgan

    Money seems to be the biggest issue for most people who are considering hybrids. If a Prius is 23- 25k and you can get a civic which costs $7-10 grand less but still gets 35-40 mpg why even bother with an over priced hybrid? Gas would need to be above $8 a gallon to bridge that difference in that price. my $0.02

  • HVA

    At both sides of the margins, vehicles with really good gas mileage or really poor gas mileage are both very difficult to forecast right now,” said Clark. “But if you’re doing your cost of ownership calculation—which more people are doing right now—the impacts are significant.”
    —————————————————————————————–
    If I have to buy a new car at this time, it would not be Honda Fit or Toyota Yaris or Big SUV either. Fit or Yaris are too small/unsafe for me for highway speeds, unless we reduce speed limit to 55 MPH. Big SUVs are out of question for me even if I may be loaded with cash, that I am not anyway! May be Civic or Corolla, but surely 4 cyl Accord or Camry and these cars in hybrid version are a plus. GM/Ford/Chrysler has to do much better with their quality, grew up driving these brands. Who wants to repair bills and almost $4/gallon?

  • sean

    JP Morgan,
    If you think price of Prius is expensive, come to Australia. It’s > AUD37,000 for the base spec model. And one AUD is nearly one USD!
    Gas doesn’t need to go to $8.00/gallon to make sense. There have been disscussions about that.
    Take your 2 cents back.

  • CLD

    While JP Morgan’s mileage figures are a little high (When people talk about the mileage they get, they usually mean what they saw flash on the trip computer as they were driving on the highway downhill with a tailwind.), his dollar figures aren’t too far off. The EPA combined mileage of a 2008 Prius (base price $21,500 US) is 46 MPG. A 4-cylinder 1.8-L Civic (base price $15,010 US) has an EPA combined rating of 29 MPG. With the current national gas price of $3.94/gallon, to pay back the $6490 difference, you would have to drive about 130,000 miles. At $8/gallon, the payback would occur at about 65,000 miles. Of course, that’s assuming that you paid cash and are not counting the TT&L.

    That being said, I prefer the Prius. However, I do not begrudge someone who runs the numbers and buys the Civic.

  • steved28

    JP, First off, the Civic (1.8L 5 spd) is rated at 25 city, 36 hwy. Whenever people compare non hybrids they alway conveniently quote the highway mileage, then overstate it.

  • Charles

    To HVA: According to many sources the Ford Fusion is at least in the ballpark for quality with the Camry. For a V6 the Fusion is way ahead in at least one quality rating (copyright work that you can search for).

  • peter

    next year when honda’s new hybrid costs just 1500 more than a comparably priced ice only (gas only) vehicle, even at $4 it’s economical.

  • David

    Recently sold my Infinity FX 35 (MPG – 15.9) and bought a Prius (MPG – 45.0)! I get asked by at least 2 people every day for my overall opinion of the Prius….for the price, you simply can’t beat the technology, quality, and gas mileage, as I am saving over $200 per month on gas. Best car purchase I ever made!

  • JP Morgan

    Here is some math for the civic vs. prius, I am not saying either is better but when you look at the overall dollars spent gas would need to exceed $8 per gallon to even the playing field.

    Comparative prices I have seen in the marketplace….
    Used Civic 35k miles – $13,500 over 60 months $264.00 per month (6.5% rate) + tax 810.00
    Used Prius 35k miles – $19,500 over 60 months $381.64 per month (6.5% rate) + tax $1170.00

    Payment Variance Per Month = $117.00 per month + (tax $6 per month over term of loan)

    Civic 15k miles per year @ 32MPG – $156/mo for gas @ $4/gallon
    Prius 15k miles per year @ 45MPG – $111/mo for gas @ $4/gallon

    Gas Variance Per Month = $45.00 per month

    Total variance – Net $78.00/month using Civic (see below for calculations up to $8/gallon)

    Other variables – insurance (not sure how prius or civic compare here)
    ———————————————————————————————————————–
    Civic 15k miles per year @ 32MPG – $195/mo for gas @ $5/gallon
    Prius 15k miles per year @ 45MPG – $138/mo for gas @ $5/gallon

    Gas Variance Per Month = $57.00 per month

    Civic 15k miles per year @ 32MPG – $234/mo for gas @ $6/gallon
    Prius 15k miles per year @ 45MPG – $166/mo for gas @ $6/gallon

    Gas Variance Per Month = $68.00 per month

    Civic 15k miles per year @ 32MPG – $273/mo for gas @ $7/gallon
    Prius 15k miles per year @ 45MPG – $194/mo for gas @ $7/gallon

    Gas Variance Per Month = $79.00 per month

    Civic 15k miles per year @ 32MPG – $312/mo for gas @ $8/gallon
    Prius 15k miles per year @ 45MPG – $222/mo for gas @ $8/gallon

    Gas Variance Per Month = $90.00 per month

    Payment variance of $123.00 per month still outwieghs gas variance….

  • bhgdrn

    Hey Grumble, Grumble,
    What is this “MAKE US BUY” stuff? Americans buy what Americans want. “WE” wanted big cars or the makers of cars would not have built them. Don’t blame capitalism, blame American stupidity. We were fat & happy as long as everything was going well. But now we now we need to blame somebody and why not Big Oil and Big Car. It’s our own fault for thinking that government will always make the right decisions for us. In fact, Big Government usually makes the WRONG decisions for us.
    Take personal responsibility for your action. Before voting for HOPE & CHANGE, we better find out exactly what KIND of hope & change the new BIGGER government will bring us.
    Currently we are not using our own oil, instead we buy it from our enemies. Our investment in NEXT energy research has been minuscule. Other countries are currently drilling for OUR oil in the Gulf of Mexico.
    What kind of CHANGE do YOU want?

  • steved28

    JP, not to split hairs (I don’t have a dog in this fight)
    But according to EPA 2008 numbers, your 32mpg Civic number is high, and your 45mpg is low on the Prius.

    Prius should be 46mpg, Civic should be 30mpg.

  • AP

    bhgdrn, you’re right. There have always been good alternatives to SUV’s, but that’s what people wanted when gasoline was at historic lows (adjusted for inflation) 10 years ago. Toyota and Nissan got into the big truck market, too, because they didn’t want to miss out on something that sold so well and made so much money. It’s not just Detroit – it’s that Detroit automakers are the only ones with a home market that likes big vehicles (I’m not one of them).

    As for predicting when gas prices will jump, and when consumers will care, be my guest and try. I wouldn’t have thought in 1985 (when no one drove trucks) that gas would be way cheaper 14 years later. I would have thought $3 gas would kill the SUV. It didn’t. People still wanted them. No one forced it on them; it’s still a free country (we’ll see after the election).

    As for the future, $2 gas in 2 years isn’t likely, but could happen (call me crazy, but it’s dropped before). $7 gas is also unlikely, but could happen. Try to figure out what to buy or sell with that much uncertainty.

  • PamT

    My mother bought a Honda civic brand new in ’06 with the promise of 35-40mpg. She has never gotten more than 28 mpg. I drive a 14 year old Acura that gets 28 mpg. Why bother buying either hybrid or new civic? If you are going to go small and don’t mind gas over hybrid, buy a used sport car.

  • Shines

    For those of you comparing the Civic and Prius keep in mind that the Prius is a larger vehicle than the Civic.
    As far as buying a fuel efficient vehicle now that the price of gas is 4.20 a gallon – it’s like buying stocks high or selling them low. It’s too late, you waited too long – noone with a fuel efficient vehicle for sale is likely to give you a good deal. If you must you must. In the mean time don’t forget all that other fuel saving stuff – slow down, walk or ride a bike, take the bus etc.

    Oh, and PamT – sounds like your mother needs to learn how to drive more efficiently (it’s not the car)

  • CK

    “My mother bought a Honda civic brand new in ’06 with the promise of 35-40mpg. She has never gotten more than 28 mpg. I drive a 14 year old Acura that gets 28 mpg. “

    I bought the 2006 honda civic. It was never rated 35/40. It was rated city 30 Hway40. That was before The EPA restated all milage #s recently for all models.

    I manage to get 25 city (bumper to bumper in Wash DC) and get 36-40 (@ 65-75mph) on the highway. I would prob get the 40mpg on the highway if I laid of the gas a little.

  • Need2Change

    For those with 5 year or older hybrids, it’s time to sell and get your best resell value. Hybrids older than five years of age with a $5K battery replacement looming in the future are severely overpriced.

  • JP Morgan


    But according to EPA 2008 numbers, your 32mpg Civic number is high, and your 45mpg is low on the Prius.

    Prius should be 46mpg, Civic should be 30mpg.>

    Thanks, I was just using estimated mpg’s, even if you adjust to those the math still makes a point. I am not saying one is better than the other but buying a cheaper car makes as much if not more difference than buying a hybrid that has been marked up over sticker price.

    In regards, to fuel economy you can pretty significantly increase your mileage just by laying off the gas and occasionally using some hypermiling techniques. My Audi A3 2.0T is rated 24/32, on the highway I can average 32-35 mpg in my commute by staying sub 70mph. The average for the life of the car between city/hwy so far is 28.6mpg. I could see a Civic being able to get in the 30′s on the highway at 60-70mph. But if someone has a lead foot it will reduce mpg quickly.

  • kenyon80

    Reasons other than economic to buy the Prius:
    1) It is a clear step ahead of any Honda model and it has a “real” backseat that even adults can sit comfortably in, as compared to a Corolla or Civic
    2) It might promote more research and eventually make hybrids cheaper as they become more popular
    3) Mileage is overrated in all vehicles, including the gas-only models that are cited
    4) Doesn’t it just use less gas? Isn’t that the point?

  • steved28

    4) Doesn’t it just use less gas? Isn’t that the point?

    YES! Even if it takes me 4 years to recover the cost of my hybrid, I’d rather take that money and give it to Toyota,Nissan,Ford etc. than Saudi Arabia.

  • Jason Murphy

    I think the point is saving money. I bought my first hybrid because it was expensive. I sold my gas guzzler SUV and purchased a civic hybrid.

    My car is basically paid for and my costs are recovered instantly!!!!

    By upgrading to a higher MPG I am saving $200 a month on gas… my car payment is $200 which means my gas savings are paying for the car. (My expense would have been $200 more if I didn’t by the hybrid)

    I went to http://www.MPGDude.com and used their gas savings calculator to calculate my savings if I were to upgrade.

    I was convinced after running the number at http://www.MPGDude.com. If you do not have a fuel efficient car, I recommend you do the calc.

  • Ugga

    Gandalf
    Some people did see this coming. The executives at Toyota for example. Or people like me who in 2005 traded in their guzzler for a Prius. My car is still worth $17k and I only pay $38 to get 450 miles of driving. The writing on the wall has been obvious for a long time.

  • stephen

    With 12,345 on the odometer, my Hybrid Civic (2007) is doing my finances quite well. Averaging 43.6mpg over this period was an exemplary increase from my 18mpg average 1993 Chrysler Town&Country. It is small, but it fits three kids ok and handles very well. I’d like to see a hybrid or PHEV mini-van or mid-size sedan. I’m wondering if one can upgrade either the new Toyata Camry Hydrid or Nissan Altima Hydrid? I drive a 2007 Hybrid Civic which is perfect for me (but can’t go PHEV—or can it?) and my wife doesn’t want another small car such as the Prius. The Toyota and Nissan Sedans would fit her better (Three kids + friends, etc.) and I have been passed by one each of these vehicles in the last week and they were silent (running on electric motor I’m assuming) and thus should benefit from the equipment upgrade you have for the Prius model. These vehicle at their price with the Prius upgrade battery pack would yield good numbers, but that is just an assumption. I don’t have any numbers to run like JPM.. Good insight though…Any info would be greatly appreciated. Thanks…

  • Mr. Insight

    You are forgetting to include resale prices. Anyone who bought a new Insight could now sell it for what they paid a few years ago. If they had bought a regular small car they would have lost thousands of dollars.

  • Jack M.

    No matter how much attention is put on the price of gas it will still be high, at least higher by $1.50 over last year. Hybrids and other bio fuels will take a while to get into the main stream and are not replacing the millions of cars we have on the road tomorrow that run on gas and diesel. In my ideal world gas would be the same price as it is in Argentina, 12 cents a gallon, but it’s not. So I decided to cruise the web looking how to stop the bleeding and beating my walet takes everytime I pull up to the pump. Check out this site I found, http://www.gasbankusa.com. The site talks about locking in a fixed price for gas. An interesting idea and good concept as long as gas doesn’t go down in price but I am not holding my breath for that to happen. GasBankUSA acctually looks like a pretty good solution to save on gas.

  • Gandalf

    Right on

  • Fshagan

    A Civic to a Prius is an unfair comparison; the cars are entirely different in terms of “creature comforts” on the inside. If there was a hybrid Corolla, that would be a fair comparison.

    If we choose solely on the economic scale, we’d choose either a Kia or Hyundai for a new car, or a 10 year old sedan for a used car (even if it only got 14 mpg).

    The Prius is really between the compact sizes of the Civic and Corolla and the “mid size” of an Accord or Camry. I chose the Prius over the Camry because of the feeling of spaciousness in the cockpit (it seemed larger than the Camry, but isn’t). The Prius also holds more, has a longer wheelbase, and weighs more than a Civic.

    The EPA estimates used to overstate the mileage; now they understate it. Lifetime mileage on my Prius, at highway speeds of 70 mph when I’m not stopped, is 49.6 mpg. When I’m driving carefully, and not exceeding 65 mph, I get 58 mpg (using the car’s computer).

    Anyone trading up from a 17 mpg car would do well with either choice.

  • Fshagan

    The prices have always been for a new battery from the parts department, but there’s an active market in used batteries from wrecked hybrids that see prices at about 60% of the new price. Besides that, the failure rate (except for Honda Insight and GM’s “mild hybrid” batteries) has been very low.

    “Honda, for example, will be lowering the cost for its hybrid batteries on June 1 from $3,400 to $1,968 for the Insight. The Accord hybrid could still be as much as $2,440. Similarly, Toyota’s Prius battery is down to $3,000 from $5,500.”

    From http://www.autobloggreen.com/2008/06/02/honda-and-toyota-to-lower-hybrid-battery-replacement-costs/

    The article also states that Toyota’s “post warranty” battery replacement rate is 0.003% …. a very low percentage. The key is that, unlike home built electric vehicles, the hybrid manufacturers limit discharge of the batteries to a maximum of 50% of charge, rather than the 80% you see EV people use.

  • Prius N-V

    Pruis 08 best car I bought in 40 years-bar none;including a 327′ 67 Vette when I was 24 and the world and I were different. Prius sets me free. Can jump in and ride without biting my nails like others who worry about gas price/availability on a daily basis. GROW UP, FACE REALITY the world has changed-are you listening Detroit?? The Prius looks the way it does to be aero-dynamic (Cd 0.26) for those who know what that means. Form + function=beauty. OK-lets get the petro/politics out of the way. To ask a Federal Government to be run by someone who wants it to fail (read- Republicants) is like putting ,say-Putin; in the White House, or the Arabs in charge of port security? Did we all forget that one? To deliberately set-up America for failure and to blame government employees. Example: FEMA headed by W’s unqualified buddy. Underfund agencies and to put morons at the helm and to blame an agency for not meeting its responsabilities is like pharoah saying make more bricks but you get no straw-even fundamentalists SHOULD remember that one from Sunday school-bless them (ugh). In the end, lets hope that we get better than we deserve. Only regret is that I had to buy Japanese, but still better than giving towel-heads twice as much for gas. Oh yeah and 9/11 will be forgotten just like Pearl Harbor

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