Subcompact cars take big resale price hit – Milwaukee Journal Sentinel
Despite consumer demand for fuel-efficient cars, the smallest of cars are diminishing in value — and fast, a new analysis finds.
Subcompact cars fell 26.1% in value during the past year, the biggest one-year drop of any vehicle segment in the past decade except for 2008, the year that nation’s gas prices spiked above $4 a gallon in many regions, said analytic firm Black Book.
Subcompacts include the Toyota Yaris, Nissan Versa, Kia Soul, Honda Fit, Ford Fiesta and Chevrolet Spark.
With the nation’s gas prices low, the outlook is pretty grim. Anil Goyal, senior vice president for Black Book, predicts small cars are going to continue to lose value over the next three years. Even with subcompacts’ popularity, he said shoppers still want their next vehicle purchase to be as fuel-efficient as possible despite low gas prices.
“Smaller cars are less in demand, and the bigger vehicles are more in demand,” Goyal said.
Yet a Consumer Reports survey finds that motorists still feel strongly about the need to have cars with good gas mileage.
The survey of 1,052 adults in May found that 84% of those surveyed feel fuel efficiency is important and 73% believe that the government should continue to mandate gas mileage goals. About 60% say they are willing to pay more for a fuel-efficient vehicle if they can recoup the higher cost in five years through fuel savings. The survey has an estimated error rate of plus or minus 3.2%.
“Consumers want cars that don’t drain their pocketbook — either through costly repairs or guzzling gasoline,” Shannon Baker-Branstetter, policy counsel for Consumers Union, said in a statement.
But Goyal said car buyers are putting a higher priority on overall value when they buy a new car rather than fuel economy. “Manufacturers have been increasing their fuel efficiency for crossovers and SUVs, but it hasn’t been the primary driver for car sales,” he said.