Car Culture

Small, efficient used cars are selling like crazy right now

Could this be a repeat of the market in 2008 when we saw record prices for crappy, yet efficient cars on the used market, or just a blip?

Something interesting has been happening in the wake of news by Ford and other companies that they would be scaling back their small car offerings in favor of SUVs, trucks and crossovers, used car values for small, fuel-efficient cars have started to rise, according to Automotive News.

This phenomenon isn't new, by any means. It's not hard to remember back to the summer of 2008 when gas prices spiked nationwide, and all of a sudden three-cylinder Geo Metros were commanding a used car premium again. What's interesting is that many of these companies cite lack of sales of new small cars as their reason for discontinuing them.

Cars like the Ford Fiesta are demanding higher prices than before, thanks in part to people's fear of high gas prices.

Wayne Cunningham/CNET

"The vehicles that retail under $15,000, and especially those you can retail under $12,000 — there's not enough of them," said Brandon Caldwell, retail operations manager at Friendship Ford in Bristol, Tennessee, in an interview with Automotive News. "Dealers know that, so when you go to the auction to buy these cars, dealers are paying much more than they were a year ago because of the demand."

Edmunds found in its latest used car report that compact car prices were up by 3.9 percent, which isn't Earth-shattering, but it reverses a general trend for non-SUV and truck sales. By comparison, used car sale prices are up 2.2 percent across the board, again according to Edmunds but that could be attributable to a number of factors.

Will we see this trend continue? Will automakers soldier on with their planned lack of anything that's not a crossover or a truck or will they see that there is money being left on the table and go back?