Now's Not the Time to Trade in Your SUV
Good luck.
A study by CNW Marketing Research says dealers will welcome you with open arms when you come to buy that new car, but they’ll treat your trade-in as if it has the plague because it's going to sit on that used-car lot for an eternity — if not longer.
CNW says that, thanks to high gas prices, dealers have a 130-day supply of unsold SUVs on their used lots that were taken in trade — more than double the 57-day supply they had a year ago. A 60-day supply is considered normal.
As a result, if you bring a full-size SUV in to trade, you'll find that it's worth about $3,000 less now that gas is $4 a gallon than it was a year ago when fuel was at $3 a gallon, CNW says.
So, how difficult is it to get rid of a 12-13 mpg used SUV now?
CNW says it takes at least 66.4 days on the lot and a 20% discount to dispose of one this year, versus a 48-day stay and a mere 8% discount from book value a year ago.
Bob Stasek, a Wheeling, Ill., Chevrolet dealer, says the fact that big SUV values have plunged on trade-ins isn’t a surprise.
"It should be no mystery that with the price of gas, big SUVs obviously aren't easy to sell,” he said. “Would we rather see a person trade in a Cavalier than a full-size Suburban? Absolutely. But at least I would say consumers aren't dumping big SUVs to get out of them; we see no overwhelming bail-out."
Stasek said some families simply need the space for people and gear that a big SUV offers, while others aren't going to attempt trading one in now, when values are depressed in a buyers’ market.
"But they are adjusting to the gas price craziness by driving them less miles," he said.
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A similar thing occurred in the early 1970's when gas guzzling station wagons were pretty much worthless at trade-in time. We just don't learn the hard lesson about the constant and unpredictable law of rising gas prices and the market saturated with cars that suck up gas like it's going out of style. Do I feel sorry for those owning large SUV's? No way. You're one of the reasons gas prices are so high now. Here's hoping your Hummer is worth $10k less when trading it in for a Civic.
Amen! I have 0, zilch, nada sympathy for those people. It's been widely known that this could/would happen and it has. Good for them!
I have no plans to trade in my Jeep Grand Cherokee just because of gas prices. Sure it costs me about $50 a month more to fill up than it used to, but a new car payment would be a lot more than that.
If anything I'm enjoying it more as I've gotten so sick and tired of having green this and earth that crammed down my throat at every turn.
Well perhaps one day you won't have much green this or earth that left! Your heirs probably won't. ;)
Steve, you're the perfect example of why people must be reminded over and over about saving the environment. Your "me, me, me" attitude is of an aging generation. The earth is getting smaller by the minute, so we must all change our wasteful lifestyles now.
There is an interesting cover story in this month's Wired about the misconceptions about saving the earth. Basically, don't eat organic, live in big cities, live in warm climates with a/c vs. cold w/heat.
Or you can live in SF without heat or AC and wear sweaters and use blankets!
Steves attitude is very common amongst those that own the big SUVs and trucks (and I know quite a few of them). The only thing is that most of them are pulling down $100k a year and even though they complain a little about the price of gas, they can afford it. Maybe it will have to take $10 a gallon to change some attitudes.
I have an 15-17mpg SUV. Am I sorry? no way. I need the thing to tow my big boat or pull the ATV trailer, or haul the labrador, guns and friends through the mud at the hunting club. Sure, we have a 30 mpg Camry for the other times. I'd buy an electric car for city use if one was available at a reasonable price with a reasonable life on the batteries.
The epitome of U.S. excess and gluttony.
I don't own an suv but neither do I think there's any need to bash people who do. Once an appropriate tax has been decided on gas then let the market control how much people buy. One day we'll all be burning clean/cheap solar electricity and I bet the cars won't be small!
Oh yeah here's a true story. I used to drive a v8 mustang to work. A co-worker bought a prius partly for the mileage and partly because he loved all the gadgets. Anyway I realized that he burned more fuel all told than i did with my guzzler. My commute was 4 miles, his was something like 60. Yes, he minimized his impact on the environment *for his commute*. But he still maintained a lifestyle that was inherently wasteful with that commute.
I would rather see people live closer to their jobs and take mass transit. The me mentality is what will reduce our great nation to a third world economy.
How about just crash it and make it a total loss?
At our dealership I've been getting full size trucks and SUVs appraised left and right lately.
Unless it's in crystal clean condition you're going to be looking at ROUGH BOOK value- tops.
And most people aren't willing to swallow that just yet. They understand that they're sick of putting gas in it, but at the same time they don't understand that no one else wants to put gas in it either.
That's why only the very serious shoppers who've basically already made up their minds should be looking to trade their gas guzzlers in right now.
No J. Crashing is dangerous. Bring it West Philly and run.
Police will call you.
Just crash it in a river (or any body of water) then.
Definitely a total loss for that.
"CNW Marketing" still claims SUVs will go 300,000 miles which at 15 MPG would be 20,000 gallons. At $4/gallon, the SUV owner would pay $80,000. They also claim a Prius will only go 110,000 miles at 45 MPG, 2,500 gallons at $4/gallon, $10,000. Even three Prius would only cost $30,000 in gas leaving $50,000 to buy two Prius. "CNW Marketing" forgot who pays the gasoline bills and that money is also green.
When "CNW Marketing" published their "Dust to Dust" report, SUVs had a 60 day inventory and Prius were at a 6 days. Today, that gap is even larger in spite of "CNW Marketing" attempt to green-paint SUVs because they forgot that dollars are also green.
I have no illusions about the state of hybrid technology, good, it could be better. Al Gore's Partnership for a Next Generation of Vehicle was right (see Wiki) with 80 MPG vehicle proposals in 2000 from all three USA manufacturers. Instead, they took the lazy approach and we are reaping the rewards of short sighted 'next quarter profits.'
Bob Wilson
Theron -
How can you compare a 4 mile commute in a mustang vs a 40 mile commute in a prius. Your V8 Mustang is inherently wasteful. It's probably safe to say that there are days that you drive it more than 4 miles a day. The Prius driver is doing musch better than if he did the same commute in your mustang. In my book he earns more points with me than you do.
Bob Wilson: Don't blame car makers for giving people what they want. The simple fact is that SUVs became the "cool" thing to own. If you owned an SUV you were "tough and rugged". Same thing went for pickups. Minivans, became the epitome of "uncool" even though they usually provided at least as much room for less money and better fuel economy.
Once SUVs achieved a critical mass, "keeping up with the Jones's" kicked in. Remember that all the foreign makers jumped into the big SUV market and the Japanese also jumped into the big pickup market.
Meanwhile ALL cars grew in size and weight. My neighbor has a rather old Camry. Whne you compare it to our newer Corolla, the size is very close. A new Camry is far bigger than an older one. Even the original minivan grew a lot. The original Caravan was much shorter than the minivans of the last 6 years or so.
All the above was caused by consumers dumping smaller and efficient for bigger and less efficient. That raised demand for gas (oil) and contributed to the current run-up in cost.
ermatthe
Interesting insight. Thanks for sharing!
Ziggy,
I disagree- people with extremly long commutes like the one Theron mentioned shouldn't get a pat on the back just because they go out and buy a prius. I wonder what that guy was driving before the Prius? I too have a big car and my best friend has a tiny little car. I live near work (2 miles) and she commutes about 20 miles with traffic. Her car's carbon footprint is more than triple what mine is with all driving included even trips- we did it using the calculator on this site. She's saving a few bucks on her mortgage living way out there, but with gas prices rising, it is catching up big time- plus she is just plain using more resources than she should.
Also, Therons friend (and me too) can walk or ride a bike to work- that uses no gas. A hybrid can't beat that.
Broq
Broq: What happens if you lose your job and have to take a new one 40 miles from home? What happens if your employer moves to a more distant location?
Don't you think that your coworker would like to have a comparable job closer to home? Who wouln't?
My wife had a job about 6 miles from home. Business started to get bad. She found a nice new job about 30 miles from home. Does she enjoy the new commute? Of course not. Fortunately she has a Corolla so the gas expense is not as much as would be with a larger car or SUV.
Sam,
Your "what if" might be true in some parts of the country, and in those cases I know we have no choice. However, in houston, people, CHOOSE to live way out in the middle of nowhere- there is nothing there to begin with, so there is no chance that your scenario would be true for them. Those are the people that I am talking about.
Broq
Broq's right. If you live in an urban connurbation you will probably never be faced with such along commute. You lose your job, you find another job in the city. Here in Chicago it is highly unlikely that your company will relocate far becuase most companies know they are better off in the city.
I guess if you are already in the burbs then you are more at the whim of the employer but still, i don't understant why people even consider jobs more than 30 mils from home.
I guess here in Chicago the job situation isn't so bad that you'd ever need to consider it.
Mart and Broq
Your talking about situations that occur in large urban areas that might have an abundance of employment opportunities and mass transit. This is is not the case where I live and it is not likely in most parts of the country. Your right - it is a choice. I choose to pay lower taxes, have a lower house payment, have my kids in better schools and drive the 40 mile commute.
BTW - the carbon footprint of a prius is less than half that of the average vehicle. With that I would assume that if you drive a prius 40 miles a day that you are doing better than most vehicles with the same commute.
Mart -
When was the last time that you've had to apply for a job? I have sent in resumes for jobs in the past year to find that there were over 100 applicants for the same job. Unless you work in areas like healthcare or computers you just can't get a job anywhere you please. You have to take what's out there and if it means driving 30 miles then that's what you need to do.
sam,
People did not want fuel inefficient SUV. It is the marketing people made them want it.
Who wants to smoke cancer sticks if there isn't any marketing for them?
J,
What are you... about half ferret? Go throw yourself over a cliff (I heard it's fun!!)
Why NOT get a Prius? I bought mine 82,000 miles ago because it's a (useful) hatchback, came with tax breaks, and isn't an SUV that rolls over, is hard to park, annoys other drivers trying to see around me at an intersection, and isn't a death sentance to a pedestrian or biker in a collision.
The Prius is big enough for four or five people( and a couple of dogs ), lots of groceries, a few rhododendrons, or enough wood to floor my bedroom. It goes in the snow, is pretty quiet, and has seats that won't make you squirm. It's boring.
My son needed a car to attend grad school. I gave him my Prius; and, after considering many replacement options, was swayed by the reality that the Prius is pretty good for most of my transportation needs AND I had spent NO money on repairs in four years. That and 46 mpg is hard not to like.