Used hybrid car prices are falling, and this may be good news.
Consumers have lost their appetite for pricey hybrids, two industry experts say, leading to a drop in used hybrid values and an oversupply of new ones.
Used hybrid values are down 23.5% since their peak last summer, says Juan Flores, director of vehicle valuation for Kelley Blue Book. Just since the beginning of 2009, they've fallen 4.5%, while used vehicle prices overall are going up as more buyers opt for used over new.
Although I disagree with the 'lost their appetite' statement, it's very interesting to see used prices coming down finally. The total lack of inventory on the marketplace led to an over pricing of used hybrids.
Why these numbers are misleading
Up until a short time ago, a used hybrid cost as much as a brand new one was supposed to. It had to come down, because it couldn't go up. If the used hybrid cost as much as a new one, you might as well get in line at the dealer and go for new. Of course, that meant that some dealers could charge even more for the new!
But there's also something else going on here (I'm beginning to feel like a broken record, here). The new Insight from Honda, the next generation Prius from Toyota, plus the addition of the Ford Fusion and Mercury Milan Hybrids to the mix in the coming months is making many people wait to buy. Which means the overall market is going to go down, which means a lot of the pressure on used hybrids is down.
Also, and this may be even more important, which hybrids are we talking about? Some hybrids are full hybrids, while others are mild. And hybrid buyers tend to be informed, well educated, older, wealthier buyers. They're not going to go in and overpay for a mild hybrid. And even if we restrict ourselves to just full hybrids, not all hybrids are built equally! Look at the wide differences in what's available now in the hybrid marketplace (mild v full, luxury v others, SUV v car, GM v Toyota v Nissan v Honda, etc...) and you can quickly find vast differences in what's available, what's fuel efficient, and what's worth paying more for.
The end results
And so you see a reduction in prices of used hybrids.
Toyota is going to push to sell the remaining Prius they have to make room for the new ones. Honda wants a big push for the new Insight. If you buy a newFusion or Milan Hybrid now, you can still qualify for the full tax credit.
All in all, this may be your best time to buy, new or used.