KBB: Low Fuel Prices Have Used-Vehicle Buyers Flocking to High-Performance Segments
April 27, 2016
IRVINE, Calif. — The used high-performance and sport car segments outperformed every other vehicle segment at auction during the first quarter of 2016, according to Kelley Blue Book’s Blue Book Market Report for the first quarter.
“Interestingly, the high-performance and sports car segments outperformed all other segments," said Sean Foyil, analyst for Kelley Blue Book. "As a result of low fuel prices, consumers are less concerned with fuel efficiency as a factor when choosing their next vehicles and more concerned with other aspects, such as performance, which explains the continued decline for electric and hybrid vehicles compared to the rest of the market."
Fuel prices, the report noted, remained at a lower starting point in the first quarter than in the last two years at $2.03 per gallon. The price fell 31 cents in the middle of February; however, it rebounded to $2.08 in April.
"The average price per gallon of fuel is down 14%t year over year," Foyil added. "However, we are seeing seasonal trends consistent with previous years and expect fuel prices to rise at a slow and steady pace into the summer months."
While this drop in fuel prices has been good for the high-performance and sport car segments, it's been particularily bad for the electric and hybrid segments.During the first quarter, high-performance vehicles and sport cars realized a 2.9% and 2.5% increase in value at auction, respectively, whereas electric and hybrid vehicles experienced a 7.5% and 4.9% drop in value, respectively.
According to the report, an abundance of volume at auction continues to lower auction values for used vehicles. In the first quarter of 2016, auction values for used one- to three-year-old vehicles were down 1.3%, or about $235. This decline, the report added, was atypical for a quarter that normally sees used-vehicle values increase by 2% to 4%.