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Gas prices rose to $3.05 per gallon over the recent Christmas holiday. This is the highest price ever recorded during the holidays which is a very bad sign.
Overall, gas prices have almost doubled in the last 2 years, and the predictions for future prices don't look pretty.
The former president of Shell Oil believes gas prices are due to rise to record levels and some analysts think gas prices will reach at least $5 a gallon in the next few years.
So what does all this mean for car buyers?
It's likely there will be some huge price drops on SUVs and pickup trucks, while smaller cars will see price increases if gas continues to rise this year.
Back in 2008 when gas prices hit record highs, consumers turned away from larger vehicles and embraced more fuel-efficient, smaller cars like the Honda Civic and Toyota Corolla.
Some dealers, in desperation, were offering unbelievable discounts on large SUVs and pickup trucks - one even promoted a buy 1 get 1 free deal.
The reverse is also true - small and fuel-efficient cars, due to higher demand, will start seeing price increases, just as they did back in 2008.
If you're thinking of buying a large SUV or pickup truck, it may be worthwhile to wait. If you're thinking of buying a compact, fuel-efficient car, you may want to buy one soon to lock in the price.
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