Industry News: Prices of Used Subcompact and Compact Vehicles Are Rising

[William Maley]

With more people trending towards trucks and utility vehicles, it would be expected that prices on cars would be falling. But not on used cars according to Edmunds.

In their latest Used Car Report, Edmunds says the average price for a used subcompact rose 3 percent in the first quarter. Compacts saw their average price increase by 3.9 percent. The reason according to the report is due to the increasing cost for a gallon of gas. 

"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 With rising fuel costs breathing fresh air into this segment, subcompact and compact cars are finally retaining value again," said Ivan Drury, senior manager of industry analysis at Edmunds.

With rising gas prices, the expectation would be that prices on used trucks and utility vehicles would drop. But Edmunds says prices for these models are holding steady as buyers are willing to pay a bit more at the pump as they place "value on increased cargo capacity, ride height, and other SUV and truck features". 

Source: Edmunds

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[David]

Totally makes sense, right now many feel comfortable in their job and security and are willing to give up MPG for room, comfort and space.

Yet as the BP study seems to show, demand is increasing big all around the world and as such prices are rising across the board. I have to wonder if we have not seen the final days of low gas prices with the next wave of increases in gas to be permanent. 🤔

[loki]

3 hours ago, dfelt said:

Totally makes sense, right now many feel comfortable in their job and security and are willing to give up MPG for room, comfort and space.

Yet as the BP study seems to show, demand is increasing big all around the world and as such prices are rising across the board. I have to wonder if we have not seen the final days of low gas prices with the next wave of increases in gas to be permanent. 🤔

would be interesting to see some $/mile for vehicle categories,brands,industry average over, idk, quarterly timescale. it feels like the last 10 years big jumps have happened in all but the biggest SUV/truck groups.

[Robert Hall]

It's interesting, just as US automakers are cutting car and particularly small and midsize car lines in the US...seems short sighted.. 

[riviera74]

2 hours ago, Cubical-aka-Moltar said:

It's interesting, just as US automakers are cutting car and particularly small and midsize car lines in the US...seems short sighted.. 

If compact and subcompact cars were selling like compact and subcompact crossovers, no one would cut the cars out of their lineups at all.  For a subcompact to really do well, you need $4 a gallon minimum.

[Robert Hall]

1 minute ago, riviera74 said:

If compact and subcompact cars were selling like compact and subcompact crossovers, no one would cut the cars out of their lineups at all.  For a subcompact to really do well, you need $4 a gallon minimum.

When prices hit $4 again, Ford will be regretting their short sighted move, I suspect...

[Drew Dowdell]

The problem is that people aren't willing to spend what manufacturers are asking for new compact cars. I tested a Cruze hatchback RS Redline edition. It was a great car, but the sticker price was $27k. That is insane for a Cruze, or any Focus that isn't an RS.  Civics can crest $30k now. 

A Trax and a Sonic cost roughly the same to engineer and (labor costs being the same) build.  But people will pay more for a Trax than for a Sonic. Chevy could offer rebates on a Trax that bring the price all the way down to the sticker price of a Sonic and still make money on it. 

It's not that people don't want sedans, it's that manufacturers are making more money on SUVs and fake crossovers.

[daves87rs]

1 hour ago, Drew Dowdell said:

The problem is that people aren't willing to spend what manufacturers are asking for new compact cars. I tested a Cruze hatchback RS Redline edition. It was a great car, but the sticker price was $27k. That is insane for a Cruze, or any Focus that isn't an RS.  Civics can crest $30k now. 

A Trax and a Sonic cost roughly the same to engineer and (labor costs being the same) build.  But people will pay more for a Trax than for a Sonic. Chevy could offer rebates on a Trax that bring the price all the way down to the sticker price of a Sonic and still make money on it. 

It's not that people don't want sedans, it's that manufacturers are making more money on SUVs and fake crossovers.

It's one of the flat out biggest reasons I've seen...this coming from someone who owns a few Cavaliers and a Cobalt...

They are easily about almost a third too much right now...that same hatch should still be well under 25k.....

Between the economy and gas prices, I feel like I am changing my choice of car daily....

The Nox and Escapr are the easy choices....but one can't go wrong with a Cruze hatch either.....

[Drew Dowdell]

7 hours ago, daves87rs said:

It's one of the flat out biggest reasons I've seen...this coming from someone who owns a few Cavaliers and a Cobalt...

They are easily about almost a third too much right now...that same hatch should still be well under 25k.....

Between the economy and gas prices, I feel like I am changing my choice of car daily....

The Nox and Escapr are the easy choices....but one can't go wrong with a Cruze hatch either.....

It's also the reason used prices are increasing. The people who do want sedans are playing the depreciation game to get the price to be more reasonable. 

[David]

15 hours ago, loki said:

would be interesting to see some $/mile for vehicle categories,brands,industry average over, idk, quarterly timescale. it feels like the last 10 years big jumps have happened in all but the biggest SUV/truck groups.

Agree, I think it would be very interesting to see from 2000 to 2017 a chart showing this level of detail on how the auto industry in all categories has gone. I think you would be right in seeing very small gains in the SUV/Truck segment compared to the car segment.

[loki]

20 hours ago, daves87rs said:

It's one of the flat out biggest reasons I've seen...this coming from someone who owns a few Cavaliers and a Cobalt...

They are easily about almost a third too much right now...that same hatch should still be well under 25k.....

Between the economy and gas prices, I feel like I am changing my choice of car daily....

The Nox and Escapr are the easy choices....but one can't go wrong with a Cruze hatch either.....

more so with the 'nox diesel.

it'll be interesting if mazda puts the x engine in the CX-3 soon.  29 city / 34 highway now , but add ~25% makes it ~35/43  This will be why the small CUV/Crossovers(?) may continue to dominate even in $3.50+ gas prices

[daves87rs]

13 hours ago, dfelt said:

Agree, I think it would be very interesting to see from 2000 to 2017 a chart showing this level of detail on how the auto industry in all categories has gone. I think you would be right in seeing very small gains in the SUV/Truck segment compared to the car segment.

Yep, they come with way more than I remember....