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It’s no surprise that higher gasoline prices mean higher prices for fuel-efficient cars.
But the effect is much more pronounced for used cars, according to researchers from Northwestern University and the University of California, Davis.
When gas prices rise $1 per gallon, the price difference between the most and least fuel-efficient cars increases by $363 for new cars. For used cars, the price difference leaps by $2,839.
Part of the reason is supply and demand: People with fuel-efficient cars are more likely to hold onto them when fuel prices are high. That limits the supply of used, fuel-efficient cars at a time when demand is high. Supply of new fuel-efficient cars, meanwhile, is steadier.
The Associated Press
