The Auto Writer

I drive a 2001 Dodge Neon ES, a car with less than 40,000 miles on it. When I purchased it from the used car dealer five years ago, it had just 17,000 miles on the odometer. I paid exactly $7000 for the car, not a bad price for a vehicle with low miles.

As you can tell, I don’t drive the car all that much as I work from home and only have need of it about two days per week. My wife and I have thought about selling it, but on those days when I really need a vehicle, sharing her Toyota RAV4 would just not work out. Besides, at the rate that I am going, I’ll still have a low mileage car to give to my oldest child when he starts driving in seven years!

My car is in excellent condition and would fetch a nice price if I were to sell it. What has surprised me is that its book value is still very good and could net me about $5500 if sold privately according to Kelley Blue Book. When I purchased the car I expected to keep it for about seven years, thinking that I would be driving it a lot more than I currently do and be in the market for a new set of wheels by then. Instead, I have driven a lot less than I thought I would, therefore the car has only depreciated by about $300 per year!

The trend for higher prices for fuel efficient used cars is spreading with J.D. Power reporting that the average price of a compact car has risen by 2% in the past year. Conversely, the resell price for big trucks and SUVs is dropping rapidly, with many consumers likely holding a vehicle that is worth less than what their loan payoff amount is.

A recently published Associated Press article details the experience of a used car dealer in Atlanta who is selling his compact cars at a premium price. Though his lot only holds 15 vehicles, he has filled it up with compact cars he bought at automotive auctions in Orlando and Atlanta. As a result, his cars are selling as people look for a way to deal with gas prices approaching $4 per gallon.

Sure, I’d prefer to drive something else, but my Neon serves my needs and it certainly is the right kind of wheels for the current price run up. Though I believe gas prices will eventually retreat, the demand for fuel efficient vehicles will likely remain strong, including for plain jane compact cars such as my 2001 Dodge Neon.