May was an expensive time to buy a car — pretty much any car, but new and used fuel-efficient vehicles in particular. Now that gas prices have settled down, and auto dealers look to ramp up sales, car buyers can expect more incentives and cheaper prices.
Data released today by Kelley Blue Book indicates that the value for used fuel-efficient vehicles has peaked:
For the first time since January, values for subcompact, compact and hybrid cars have started to decline in response to falling gas prices. In fact, Kelley Blue Book analysts currently see values for some of these vehicles dip into the red for the first time since January.
Meanwhile, the AP reports that May, when the average price paid for new American cars reached all-time highs, was a pretty awful period for automobile sales:
The drop in auto sales was 2.9 percent, the sharpest drop in 15 months. But it was largely because of temporary factors: Buyers received fewer dealer incentives, and dealers ran short on popular fuel-efficient models. The natural disasters in Japan disrupted shipments of cars and component parts to the United States.
[time-link title="(Read about the Top 10 Most Valuable Used Cars.)" url=http://moneyland.time.com/2011/06/09/top-10-most-valuable-used-cars/]
After a bad month of sales of new vehicles, manufacturers and dealers will be more likely to wheel and deal in the summer and beyond. And since gas prices stopped rising and even came down a bit, fuel-efficient used cars are also expected to sell for less in the weeks and months ahead.
Does that mean now is the time to buy? Nope. While you’d probably get a better price today compared to a month ago, the standard advice given this spring—that unless you really need a car now, it’s best to wait until fall (or beyond) for prices to decline substantially—still holds true.
Here’s what Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book, suggests:
“Our advice to dealers and consumers is to shop with caution today, since values are likely to fall through the early part of summer. If possible, it would be best to hold off on purchasing a fuel-efficient vehicle until after summer, when values should be more stable.”