Ditching gas guzzler may cost you


Even as gasoline prices finally start to recede, I'm betting a number of valley drivers still are ready to dump their fuel-guzzling SUVs and pickups.

Turns out that may be as bad an idea as buying the monstrosity in the first place.

Kelley Blue Book, a company that prices new and used vehicles, recently announced that by June the SUV market had dropped more than 8 percent since September 2007, which has led to a depreciation of up to $5,000 for an SUV.

Jack R. Nerad, an executive for Kelley Blue Book, said, "While it might be tempting to trade-in your big SUV after spending $100 to fill its gas tank, it is important you take everything into consideration before you decide to change vehicles or you may end up spending thousands of dollars to save hundreds."

Nerad noted that although motorists may be bothered by gasoline costs, the price to buy, operate and insure a new vehicle probably will outweigh the fuel costs.

Meanwhile, media reports nationwide have indicated car dealerships won't accept an SUV or a pickup as a trade-in.

I wanted to find out about the situation locally.

Allen Lee, general manager of Findlay Honda in the northwest valley, agreed that the resale market for SUVs and pickups is "soft." In other words, the market has been flooded with these vehicles and their value has dropped, in most cases by thousands of dollars.

"People are not looking in as great a numbers to buy those types of vehicles as they are to sell them," he said.

Not that it hasn't happened, but Lee said he's not heard of dealerships that wouldn't accept an SUV or pickup as a trade-in.

"We've never turned down a trade for (those vehicles) and never will," Lee said. "But obviously the value could be less."

Motorists have been buying pickups and SUVs for years because of the way they look, he said.

"What people have to do is look at their own situation," Lee said.

An SUV or pickup driver who wants to sell needs to consider whether they owe more on their vehicle than it's worth.

"If you've got so much negative equity, saving on gas is not going to gain you that much, because you still have to pay off debt," Lee said. "It's not accomplishing a net savings."

Lee said he's tried to be a consultant to many buyers, rather than a salesman. "But there are people who are worried and say, 'I feel terrible about taking that loss, but what if it's worse six months from now,'" Lee said.

But even with today's fuel prices, he said, buyers still are around for these vehicles. Construction workers need pickups for their livelihood, and parents with four or five kids need a Suburban to haul the family around.

For those who need these vehicles, Lee said, "there are some great buys out there from a consumer standpoint."

As a result of the fuel prices, Lee can't keep Honda Civics, one of the most fuel-efficient vehicles made, on his lot. "Six or seven months ago I had 75 Civics on the ground. Today I have seven."

Honda has promised to increase production of the vehicles.

So, is it worth it to sell?

Edmunds.com, an online resource for automotive information, has created the "Gas-Guzzler Trade-In Calculator" so consumers can determine just that.

Here's an example: If a motorist trades in a 5-year-old Ford Expedition, worth $9,807, for a 2008 Honda Civic worth $16,328, there is a $6,521 difference. If the motorist drives 1,000 miles a month and pays $4.05 a gallon (the valley average this week), the Civic will save them $135 a month in fuel costs.

According to the calculator, it would take four years to make back the additional cost of the Civic. And that's not considering any interest you may have to pay back on a loan.

Visit www.edmunds.com/calculators/gas-guzzler.html to check out the calculator.

Philip Reed, an advice editor for Edmunds.com, warned drivers to calm down and look closely at the dollars and cents.

Reed said, "If people make a panicked car-buying decision, they could lose thousands of dollars just to save hundreds of bucks at the pump."

If you have a question, tip or tirade, call the Road Warrior at 387-2904, or e-mail him at roadwarrior@reviewjournal.com or fmccabe@reviewjournal.com. Please include your phone number.

 

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