IRVINE, Calif. — Increasing gas prices have encouraged consumers to trade-in their SUVs for smaller, more fuel-efficient vehicles, but it is important to examine the big picture before making a final decision.
According to Kelley Blue Book, the SUV market has dropped more than 8 percent since September of last year.
Depreciation. Kelley Blue Book data reveals depreciation between $3,000 to $5,000 in SUVs during the past six months.
While depreciation is common, 8 percent is generally seen over 12 to 18 months, not six to eight months. Mid-size SUVs have dropped 7 percent, while large SUVs have declined 8 percent. In addition, full-size trucks have depreciated 8 percent along with the entire market.
“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,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book and kbb.com.
May be better off
“Large SUVs and SUVs with four-wheel drive are nearing their minimum price points so we expect depreciation will slow, and we anticipate there will be an uptick in buyer interest in SUVs as we approach winter, contingent on regional factors and gas prices.
“Hanging onto your current vehicle and riding out the current gas prices could be the most economical answer.”
Don’t let emotions make your decision — you might be troubled by your current gasoline costs, but costs associated with acquiring, operating and insuring a new vehicle will most likely outweigh them.
Points to ponder
Below are a few suggestions in determining whether to sell your SUV:
Is your SUV paid off? If not, be aware that you might be “upside down” on your current auto loan, owing more than it’s worth
Do the math — look at the monthly payments for your alternative vehicle, check your credit and research all financing options Calculate monthly gas mileage for alternative used and new vehicles. Miles-per-gallon information and fuel-tank capacities are available on www.kbb.com
Choose wisely — make the decision that best fits your needs without tiring your purse strings.