Expert on blowing
- Feb 12, 2003
tales of woe
there should be congressional hearings on predatory lenders like these. no one told them the costs of ownership would increase while the value decreased.The sale of new SUVs and pickup trucks has dropped precipitously in recent months amid soaring gas prices and a weakening economy: SUV sales for the month of April alone fell 32.3 percent from a year earlier and small car sales rose 18.6 percent. This fundamental shift comes against a backdrop of relentless gas increases, and growing concerns over the environment and US oil consumption, according to auto analysts and car dealers.
"The SUV craze was a bubble and now it is bursting," said George Hoffer, an economics professor at Virginia Commonwealth University whose research focuses on the automotive industry. "It's an irrational vehicle. It'll never come back."
With stocks of unwanted new SUVs and pickups piling up at dealerships across the country, automakers are offering unprecedented promotions. Incentives for large SUVs, including cash rebates, topped $4,000 in March, or more than double those offered in March 2002, according to Edmunds.com, which monitors the motor industry.
At the same time, consumers like Chrystall are flooding the market with used SUVs, trying to trade in hulking Hummers for compact Corollas, and getting thousands of dollars less than they would have just a few months ago. In April, the average used SUV took more than 66 days to sell, at a 20 percent discount from vehicle valuation books, such as Kelley Blue Book, compared to 48 days and a 7.8 percent discount a year earlier, reported CNW Marketing Research, an automotive marketing research company.
Some desperate car dealers and consumers, are willing to lose thousands of dollars just to get rid of their SUVs. Last July, 20-year-old Sannan Nizami, of Lowell, bought a 2007 Toyota 4Runner SUV for $32,000 when it cost about $65 to fill the tank. Six months later, as a gallon of gas soared to $3.50 and more, and tank refills climbed over $80, Nizami put the vehicle up for sale. He posted it online for $27,000 but received no responses for months.
Frustrated and unable to afford prices at the pump, Nizami last month turned over the Toyota to a dealer who only sells vehicles from private owners. Nizami is still paying the $450 loan but now is bumming rides to work with a cousin and worrying about making enough from the sale to cover the car loan.