Higher Gas Prices Drive Up the Price of Trade-Ins, Too

Linda Doell
·1 min read
Gas prices and trade-in offers linked to better deals on newer vehicles
Gas prices and trade-in offers linked to better deals on newer vehicles

Higher gas prices and a demand for smaller used cars -- like the Ford Focus, Honda Civic and Toyota Corolla -- has driven up the price that dealerships are willing to pay for trade-ins to the highest they've been in at least 16 years, according to the National Automobile Dealers Association's used car pricing guide.

But those prices are expected to hit their peak this month, Jonathan Banks, a NADA senior analyst, said in a NADA video.

"Strong consumer demand for small used cars is driving up prices," Banks said in a statement. "The NADA Guide increase in trade-in values for June should come as no surprise because it reflects a shortage of both new and used cars entering the market. Fewer new cars have been produced as a result of the crisis in Japan, which has shifted consumer demand to the used car market. High gasoline prices are also increasing the demand for both new and used small cars."