The year: 2008. The situation: $4 gasoline and impending global economic meltdown. The hardest-hit victims other than Bernie Madoff’s clients: SUVs.
Truck-based sport utility vehicles have been part of American lexicon since before World War II, before they were even called SUVs. They’ve held a position as a rugged carryall for families, cargo, and trailers over the roughest terrain because of their truck-based architecture. But they also suffered as a result with poor fuel economy derived from their big, powerful engines and heavy bodies.
The economic meltdown was supposed to be the stake driven through the heart of the SUV market, forever supplanted by lighter, car-based crossovers. When gas hit $4 the first time, people couldn’t get rid of them fast enough, losing thousands of dollars in exchange for much smaller cars. Now, the market is finally coming back for the once-popular sport utility vehicle.
“A lot of people with larger families or whatever have just swallowed that gas prices are what they are and there’s not much you can do about them,” said George Fussell Jr., the director of two used car dealerships in Florida, in an interview with the New York Times. “They’re not buying them for looks. They’re buying them because they need them.”
But there’s another market segment scooping SUVs up as well: Those who purchased economical vehicles for daily drivers, yet still need vehicles that can haul their families and serve weekend duty. So they’re biting the bullet and buying used SUVs en masse.
The summer of 2009 brought forth the “Cash for Clunkers” federal initiative that allowed customers to junk their SUVs and other gas-guzzling vehicles for more miserly alternatives and get some financial incentive for doing so. But as a result, it also dried up what was once a fruitful used SUV market, forcing prices back up. According to statistics in the New York Times, five-year-old SUV prices are up 23 percent this year over last year’s values.
So what does it all mean? SUVs may no longer sell in the millions as they did during the 1990s and early 2000s, but they’re far from dead. As long as there are families out there with big dogs, bigger families, horse trailers, or boats to tow around, the segment won’t be going away.
It’s just going to go niche, and prices for used SUVs are likely on a stable path upward as they become justifiable to keep around as second and third vehicles.
Source: New York Times