Rising Gas Prices Put a Chill in SUV Sales

With gas prices climbing steadily, car dealers are taking a wary look at full-sized SUVs. Nationwide pump prices are now averaging $3.05, up nearly 45 cents from a year ago and are already well into $4 territory in California and other fuel-hungry states.

While SUV sales have not yet gone over the cliff, dealers surveyed by the trade journal Automotive News say they're not taking any chances. Dealers remember being stuck with lots full of hulking Expeditions, Hummers and Suburbans the last time gas prices spiked in the spring of 2008.

Dealers fear they will soon find themselves drowning in SUVs again. “There are far more truck-based SUVs being traded in than customers to buy them,” said Mike Jackson, CEO of AutoNation.

Rising gas prices and falling SUV demand can also hurt consumers who paid top dollar for a gargantuan family hauler when they try to trade it on a more economical vehicle.

While electric cars like the Nissan Leaf and Chevrolet Volt have garnered rock-star-style press attention lately, dealers say that most consumers who might have bought a full-sized SUV a few months ago are now opting for compact crossovers – the Ford Escape, Nissan Rogue, Honda CR-V and Toyota RAV4 being the big sellers at the moment.

The compact crossovers, or mini-SUVs, are built on car platforms instead of light-truck bodies, making them lighter, more economical and more maneuverable.

Yours truly has been piloting a Volkswagen Tiguan with optional 4motion all-wheel-drive the last week or so through the snowy and icy roads of the Washington, D.C. area. It has been unfailingly sure-footed on slippery surfaces. Better yet, it is ready to rumble as soon as the pavement is dry, acting more like a Mini Cooper or VW Jetta on hilly, curvy roads.

Most auto analysts think the smaller SUVs will satisfy all but the biggest families or most dedicated off-roaders while providing superior fuel economy and safety. The latest generation of crossovers are less top-heavy than earlier versions, they have stronger roofs and nearly all come with electronic stability control, invaluable in preventing rollovers.

“The American consumer still generally wants to have a vehicle that offers a lot of utility but at the same time they are conscious of the fuel economy that the vehicle offers and what they are going to pay at the end of the month,” said Kelley Blue Book's Alec Gutierrez in a statement to Automotive News.

Speaking of Kelley Blue Book, it and other online and print publications may not yet have caught up with falling SUV values, as their statistics are based primarily on transactions that have already happened and may not be truly up to the minute.

In other words, just because you find an online or print estimate that your 2003 Expedition is worth $7,700, that doesn't mean you'll get that on a trade or that your neighbor will rush to buy it from you at that price.

On the other hand, a vehicle's value is not measured only in dollars.  Some hardy Northeasterners say they would have been hopelessly marooned during this week's blizzard had it not been for their big SUVs and say they will keep driving them until the wheels fall off.