Black Book Carefully Watching Gasoline-to-Small-Used-Car Price Ratio

gasoline in small car

by Jon LeSage, remar­ket­ing edi­tor, Auto­mo­tive Digest

Ricky Beggs wants to know: Are lower gaso­line prices caus­ing smaller used cars to see a big price drop? It could very well be….. but it will take a few watch­ful eyes to gauge the real impact.

Dur­ing the sum­mer and into the early fall, Ricky Beggs, Edi­to­r­ial Direc­tor at Black Book, was notic­ing that the typ­i­cal gas-price-to-small-car used vehi­cle value ratio was off kil­ter. Gaso­line prices were creep­ing back up, but whole­sale prices were stronger than usual for smaller cars.

Now it’s look­ing to fall in line with more typ­i­cal remar­ket­ing pat­terns. Black Book just reported that Entry-Level Cars have depre­ci­ated –16.6% over the past year, and Entry Mid-Size Cars have dropped –16.9% dur­ing that same time.

These have been the largest change lev­els of all car and truck seg­ments. Typ­i­cal Entry-Level Cars are the Honda Fit, Hyundai Accent, and Chevro­let Aveo. Exam­ples of Entry Mid-Size Cars include Volk­swa­gen Jetta, Chevro­let Mal­ibu, and Chrysler Sebring.

As for gas prices over the past year, they’ve dropped from a high of $3.78 on Feb­ru­ary 25 to a cur­rent level of about $3.29.

To give you a look at the over­all mar­ket dur­ing this time frame, the aver­age depre­ci­ated since a year ago is –11.8%. Full-Size Pickup Trucks have seen the best per­for­mance with dep­re­ca­tion at –4.4%.

Black Book will be fol­low­ing the trend to see if there’s a direct reflec­tion on gas and used car prices. Is it more of a sup­ply and demand issue, and what will it look like in 2014?

“The depre­ci­a­tion lev­els for Entry-Level Cars and Entry Mid-Size Cars are aver­age in com­par­i­son against pre-recession-level price changes, but it’s still some­thing to keep a watch­ful eye on when you com­pare with the rest of today’s seg­ment activ­ity,” Beggs said.