GAINESVILLE, Ga. – High gas prices may be actually be driving down the value of small, fuel-efficient cars.

That is the observation of Ricky Beggs, managing Editor at Black Book, and something for lenders to be wary of. Beggs asserted that the high fuel prices have increased production, and therefore supply, of compact cars, above consumer demand.

Black Book is paying attention to the possible oversupply of fuel-efficient vehicles in the compact and fuel-efficient vehicle segments. “We have noticed a trend this summer where compact, economy, and other fuel-efficient vehicle values in the wholesale markets have a larger percentage decline compared with bigger vehicles,” said Beggs. “The fact there are many more fuel-efficient vehicle choices today compared with just a few years ago may have a larger impact on declining values in the near term.”

Since mid-July, full-size SUVs have dropped in value 1.33%, while compact cars and compact crossover vehicles declined 3.1% and 2.6% respectively.

 

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