What are the graduates of the class of 2008 going to do? They’re going off to college soon and will need a small, cheap used car. They’ll need one that is inexpensive to insure.
So while these recent grads and their parents are out shopping for a decent used car, they could get a case of sticker shock. Prices for used "econoboxes" are up right now, due to high demand.
Who would have ever thought that tiny throw-away cars would become so popular that they warrant a price increase? But with the price of gas averaging more than $4 a gallon, these little hunks of metal are now becoming diamonds in the rough.
They’re good on gas, plain and simple. More and more commuters are buying them as second cars, leaving their gas-sucking SUVs and trucks at home, since they would get hardly anything for them at trade-in time.
The Wall Street Journal reports that cars like the Kia Spectra and Hyundai Elantra were among the top 10 used cars with the fastest-rising prices. The Elantra is up almost 9% from a year ago and the Spectra is up almost 8%.
Another shocker about these cars’ prices is that a used model’s price is now approaching the level of that same model, brand new. The WSJ reports that a used 2006 Honda Civic costs about $16,118, or 86% of what a new 2008 model costs. A used 2006 BMW Mini Cooper costs about 81% of what a new model costs. The used version of the hardest-to-find car, the Toyota Prius, costs 87% of the new Prius price. Typically, three-year-old used cars cost between 50% and 60% of their new equivalents’ prices.
Should recent grads and parents start looking for used SUVs and trucks instead? The upside is they’ll get a great deal on the price and a big vehicle would be good to tote their friends around in and make the move to campus each semester that much easier. The downside is they might not make enough money at their part-time job to fill the tank.