Be a Contrarian–Buy an SUV

By Marty Padgett June 5th, 2008

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Since I wrote a book on HUMMER four years ago, I've always harbored the notion of actually owning one. I don't really have a use for it other than vanity, and might put only 5,000 miles on it a year. At $50,000, though, the H2's been totally out of reach.

But now might be the time to buy one, according to the tons of ads I see on Craigslist for used SUVs--and to the Wall Street Journal story I pored over on my way to coherence this morning.

The Journal's story about SUV sales points out the paradox facing car shoppers today: SUVs have never been less logical to own, but at the same time, prices have fallen so much for new and used examples that the price of gas is less of a factor.

Discounts are huge, the Journal points out. The Chrysler Aspen pictured here is running an average of $5,000 in rebates; Ford's Explorer with a V-8 and four-wheel drive can be had for less than $25,000. "It is the ultimate buyer's market," longtime auto analyst John Casesa told the paper.

And if you drive it infrequently, the cost of fuel for an SUV might even the equation, putting a Dodge Durango within reach of a Honda Civic in operating costs--as long as you don't drive it too much.

So far this year, SUV sales are down more than 20 percent and probably are headed further south since a big batch of crossovers such as the Honda Pilot and Ford Flex are hitting the market. The question becomes, are they set to fall even more? Ford's pricing moves on the F-150 suggest it's going to get a lot more aggressive to dump SUVs and trucks before the new model year comes. If it's cheap now, how cheap will it be in September?

For sure, if anything happens this summer to boost gas prices above $4 a gallon--a hurricane, an invasion, maybe even a sneeze from Ahmadinejad--SUVs will become even bigger showroom pariahs. And pariahs come cheaply.

Posted in : 2008, Sport-Utility Vehicles |

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4 Responses to “Be a Contrarian–Buy an SUV”

Unless you are sure you’re going to drive very low miles for the next decade I’d rule out buying a SUV as your primary vehicle. If something changes like a job switch you’d have a tough time unloading the SUV, just look at used vehicle prices. If you want one as a toy (or to tow a toy) and have 20+K to burn then it’s more feasible as a second vehicle.

I could always afford any car i wanted. I did NOT buy these Automotive atrocities that were MISUSED from day one, driven to Malls by Soccer Moms instead of the Minivans they needed, and by their clueless spouses 100 miles a day commuting instead of the 40 MPG NON-Hybrid Civic or Corolla they needed.

It would be incredibly foolish to buy a POS SUV now just because they are deservedly dirt-cheap. They are going the way of the dinosaurs, and with good reason.

I do belong to the category that needs to drive few miles a day (commute is a mere 3 miles daily, but this may change when I buy a much bigger home soon). My long business trips are generously reimbursed, at $0.505 a mile and going up., so even at $4 a gallon, I make a net profit of at least $300 when I drive my “Magnificent 7″ 1998 BMW 7640iL, at high speeds on cruise and still 22-24 MPG, the 1030 miles to Wash DC and back.

If gas prices is not a big deal for you, THIS, NOT the stupid SUV, is the car you really would enjoy driving.

If you know anything about driving pleasure.

“Freude am Fahren” is BMW’s slogan overseas, ie, Joy at Driving.

(here they use the far more Ambitious “The Ultimate Driving Machine”. that has a point too)

PS even if 15 mpg city and 22 highway actual MPG is too little for you, you can still enjoy a cheap, used BMW 3-series and get over 30 MPG Highway and probably 20ish city.

Used 4-6 year old Suburbans, Tahoes, Explorers & Expeditions are are being listed for less than 8 Grand. These things were 30-50k new. Their trade in value is around 3k. That’s 90%+ depreciation. Sure am glad I didn’t by one in 2002. Meanwhile my fiancee’s Honda Civic that we bought 3 years ago for $4500 is worth $4200 even with 50K additional miles on it. I still wouldn’t consider it a good move to buy a new SUV for 25K because I’d expect it to depreciate 17K over the next 4 years. At least if you buy a used SUV for 8K the most it can depreciate is 8K. We’re still keeping the Civic though.

Ed is really full of himself. He also has opinion based on his small view of the world inside the beltway. Let me see him load his Beemer up for the cottage with 2-3 kids! Has he ever lived in an area getting more than 100 inches of snow per year. That pig SUV he dislikes so much is the reason we don’t have to hibernate 3 months out of the year for fear of getting the 2WD family van stuck somewhere. I’m always amused by the elitist view that SUV’s are a status symbol. The truth is that they are for people like Ed. The rest of us by them for the ‘utility’ part of SUV. The reality is that even in the future, most families will have a high MPG car and a SUV-type car for times they need it. On the other hand, Ed would have you pay twice as much for half the size??? Btw, have Ed explain how service costs twice what most people pay is a great deal. BMW owners get to pay inflated prices for their ego and then get to pay more to keep them up. Win Win for someone! Not Ed!