DETROIT – SUV and pickup truck owners – already stung by rising gasoline prices – are paying another penalty when it comes time to trade in or sell: falling resale values, according to the Detroit News.
The resale value of large SUVs and pickup trucks is slumping in response to a supply glut, lower demand, higher gasoline prices, and lower sales of new SUVs and pickup trucks, analysts say.
Automakers now have to boost discounts on new SUVs, hurting prices for new and used models.According to www.edmunds.com/, trade-in values on trucks and SUVs have dipped while dealers are offering larger incentives to people trading in compact cars. The average trade-in value of a year-old SUV, for example, is $24,374, down about 5 percent from a May 2004 average of $25,651. Trade-ins for 3-year-old SUVs have waned nearly 8 percent, from $18,097 in May 2004 to $17,573 today.
But many owners of large SUVs are finding it harder than ever to unload their vehicles with gas prices above $2 per gallon, a glut of used SUVs on the market, and consumer tastes shifting to-ward smaller, more fuel-efficient models, according to the Detroit News.
"If the rebate on a Chevy Suburban goes up $1,000 this month, usually the Suburbans sitting out there in our auction lane all of a sudden lost, maybe, $500 worth of value," said Tom Kontos, chief economist at ADESA Inc., a Carmel, Ind.-based firm that tracks wholesale prices of used vehicles, as quoted by the Detroit News.
Rising gas prices may help explain a recent glut in large SUVs for sale by private owners.
Autotrader.com, an online vehicle seller based in Atlanta, has more than 100,000 SUVs listed in online classified ads today than it did a year ago, according to spokeswoman Louise Barr, as quoted by the Detroit News.