Mad market for used fuel-sippers

High gas prices are driving prices of pre-owned hybrids and compact cars.

NEW YORK (CNNMoney.com) – In an atmosphere of high fuel prices, the market for used cars with high fuel mileage has gotten red hot.

Gas prices can cause greater fluctuations in used-car prices than in new cars for two reasons: used-car prices are more flexible than new-car prices and used-car shoppers generally have lower incomes than new-car shoppers.

In one extreme example, used Toyota Priuses are in such demand that they lose almost no value in the first year or two of ownership even after being driven tens of thousands miles.

For example, a 2005 Toyota Prius that when new had a sticker price of $21,515 could now sell for $25,970, even with 20,000 miles on the odometer, according to data from Kelley Blue Book. Since Toyota dealers usually charge a few thousand dollars over sticker for new Priuses, the buyer in this example probably wouldn’t have made a profit, but nearly so.

CNN/Money