Since peaking in mid-July, gas prices have been slowly inching downward. Meanwhile, vehicle resale values are starting to stabilize. Have we turned the corner on the sport-utility vehicle debacle?
Gas prices have dropped nearly 10% in the past month, to $3.71 per gallon on Aug. 18 from $4.05 per gallon on July 14, according to the U.S. Department of Energy.
And price declines for used vehicles at auction have slowed considerably. Here are some examples: The wholesale price for a midsize SUV was $8,520 in July, down just 1.1% from June. For a mini SUV, the price increased 2% in the month, to $9,529, according to ADESA Analytical Services statistics. In May, by comparison, auction prices had dropped 9% and 4.7% for the midsize and mini SUVs, respectively.
I think a big part of the problem with these so-called “gas guzzlers” is their perception in the marketplace. If all consumers hear about are high gas prices, they are bound to avoid SUVs. But once that hype starts to wear off, the market can start to normalize again.
Do you think the trend will continue to improve? I think we’re on the right track.