Time to Give SUVs a Second Look

Aug. 5, 2008 — -- Many SUV owners are considering trading in those gas-guzzlers for more fuel-efficient cars. But as auto companies become more desperate to unload their unwanted SUVs, some consumers are realizing that buying a new or even used SUV may be a deal too good to pass up.

When Leonard Thorpe was shopping for a car, his main priority was finding something safe for family trips. And a lower sticker price certainly didn't hurt.

"Well, when we bought the SUV, we were originally surprised by how low the price was, we were expecting to actually pay a lot more," Thorpe said.

Thorpe ultimately settled on a Ford Expedition for $40,000. Through dealership and company discounts, he saved $7,000.

"We felt a lot of that money could be used for gas, which it probably will be in the future," he said.

During these tough economic times, conventional wisdom might tell us to go small and fuel-efficient. That mindset drove SUV sales down 43 percent from last July.

Jessica Caldwell, an auto industry analyst, says dealers want to get older SUVs off their lots as soon as possible.

"This is definitely the time to buy, the incentives for SUVs are pretty much at a record," Caldwell said.

If you already own an SUV, some experts say not to be too quick to get rid of it.

"If you look at what you are going to get when you trade it in, and then buying a whole new vehicle, especially a fuel-efficient vehicle at MSRP [manufacturer's suggested retail price], the savings sometimes just isn't there," Caldwell said.

Some industry insiders say the best plan is to let depreciation work for you instead.

"Basically, the car will depreciate so much that you have used up the value of the vehicle, and you can dump it and get something more fuel-efficient," said Jonathan Linkov, managing editor for autos at Consumer Reports.

That's why car-buyer Thorpe is confident he made the right decision.

"We drive our vehicle for usually eight or nine years, and we get just about all the life out of them we can, so when we trade them in, we don't expect to get much return," Thorpe said.

Experts also recommend looking at used SUVs. They will be even cheaper than newer models and often have very low mileage, because the previous owners were probably doing their best to save money on gas.