SUVs And What They're Worth: Drivers Caught In A Catch-22
The e-mails tell the story. There's a mass exodus out of SUVs and gas guzzling rides. When you see the falling values on these big rigs, it's easy to see why.
An employee at a Chicago area auto dealer e-mailed that he has customers coming in with Escalades, Tahoes, Ram pick-ups and other large cars and trucks. He says those customers are often upside down on their loans and are surprised at how little they are getting offered for their ride.
Another dealer in Kansas city tells me many customers are shocked their SUVs are not worth more. Call this the sobering wake-up call to those who still doubt how much higjh gas prices are driving people to dump their SUVs.
In the first three months this year, used SUV sales dropped 8%, 8%, and 14%. New SUV sales have plunged 23%. There's a glut of these things piling up at dealerships. Which is why used SUV prices have plummeted since last September. According to Kelley Blue Book, used mid-size SUVs have dropped $2,300 to an average price of roughly $15,000. Large SUVs are down $3,400 to roughly $20,000.
So what do you do if you have a sport ute and you're sick of spending $80, $100, $120 to fill it up? Your choices aren't great.
First, find out what it's worth. Kelley Blue Book's web site, has a page where you can put in the year, make, miles, etc. and find out roughly what it's worth.
If you still owe more on it than it's worth, you're not alone. Roughly 13% of those buying new rides right now are going into it "upside down" on their previous auto loan. Don't make it worse by rolling what you still owe into a new car loan. This is a viscous cycle that will only get worse.
Look for a used car. And don't get caught up in the emotion of buying a hybrid thinking you'll save money. When you factor in the premium you'll pay for a gas/electric model, you could very well wind up making a bad move financially. Get what what you need and move on.
I think the SUV exodus will continue, and even get worse as we head into the summer. A lot of people who bought a heavy, low mileage, truck based SUV, are now wondering why they need to be driving this thing around the suburbs, when a car or more fuel efficient crossover would do the job. I suspect I'll hear more stories from people caught in this SUV catch-22.
If you are, e-mail me and tell me your situation, and how you plan to fix it.
Questions? Comments? BehindTheWheel@cnbc.com