The demand for gas-saving hybrids is so high that U.S. motorists are willing to pay $1,300 extra for a second-hand 2008 Toyota Prius. There is a long waiting-list for brand new models and even two-year old ones are selling for only a few hundred dollars less than a brand new one.

According to Power Information Network, a marketing information firm based in California, the average selling price of a slightly-used 2008 Prius with an average 8,000 miles on it, was $27,945 in June. Even two-year old models, with an average of 22,000 miles sold, for only $276 less the dealer's price for a new unit.

Tom Libby of Power Information Network attributed the spike in demand for compact cars and declining sales of large cars and trucks to soaring fuel prices.

To meet the growing demand for the Prius, Toyota recently announced that by 2010, it will produce the hybrid at a new facility in Blue Springs, Massachusetts.

The shift in motorist preference has caused a 4 percent drop in prices of new vehicles sold in May and June. The average price was at $25,924 or at the 2004 and 2005 level. It is the first price decline over the past five years. The price tag for a large pick-up truck plummeted by 9 percent for the same period.