Gas prices make SUVs a hard sell in Alabama
by WILLIAM THORNTON
Irondale’s Casey Middlebrooks would really like to sell his 2006 Volkswagen Touareg sport utility vehicle. With extras and only 30,000 miles, he’s been looking for a buyer willing to pay the $28,450 asking price.
He’s been looking for two months.
“I hate to get rid of it, but we’re definitely going for something a little more economical,” Middlebrooks said. “It’s such a good car, but we’re about to start a family.”
Middlebrooks is not alone. Surging record gas prices are causing some auto owners to look for more economical vehicles, meaning potential trouble for used SUVs.
The national average for regular gasoline Wednesday was $3.76 a gallon, an increase of 39 cents in just a month. In Alabama, it was $3.67. A year ago, gas was $2.89 in Alabama. Some analysts expect the price to go over the $4 mark this year.
That could be bad news for SUV owners and dealers. Used SUV sales have been trending downward this year - plummeting 14 percent in March nationally and down more than 8 percent for the first two months of the year from a year earlier, according to CNW Marketing Research.
Billy Clark, who purchases used cars at auction for Birmingham’s Jack Sellers Auto Sales, said he stopped buying SUVs for resale at least two or three months ago, when gas prices began spiking over $3.
“Business is no good on them,” Clark said. “I don’t think it’s any different for anybody else. Gas is affecting everybody.”
Justin Gilmore of Homewood is trying to find a buyer for his 2000 Toyota 4Runner that has 130,000 miles. He’s had several calls the last three weeks, but no one to test-drive it. He’s asking $9,250 but thinks the price might be too high. Kelley’s Blue Book recommends a price about $1,000 less.
Tom Libby, senior director of industry analysis for California-based J.D. Power and Associates, said sales of all new sport utility segments of the U.S. automotive market are “doing very poorly” from their rates a year ago, which inevitably affects used sales.
“It’s across the board - the rate of getting them off the lots, the loyalty rates of customers who will trade another similar model, it’s indisputable,” Libby said. “And it’s for all segments, compact, midsized, large, and luxury midsized and large.”
Libby said J.D. Power tracks the turn rate - the number of days it takes to sell a particular category of vehicle. The six categories of SUVs, from compact utility to large premium, have some of the longest turn rates among new vehicles. It takes an average of 78 days to sell a new midsized SUV, compared with a 61-day average for most categories.
The news is not all bad for used SUVs. While four of the six categories were the same or higher than the average of 49 days on the lot, compact and compact premium SUVs had quicker turn rates - 34 and 47 days.
But as it becomes harder to move new SUVs off the lot, those wishing to trade in or sell SUVs may find it harder to get their expected price. That is true especially for the Ford Explorer and Chevrolet’s Trailblazer and Tahoe, Libby said. more on the story
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