Hold on a minute! Your neighbors may turn up their noses,
but keeping your gas-guzzling sport utility vehicle, or buying one
coming off a lease, may be a smart move.
There are many reasons why trading now might wind up costing you money instead of saving it. Not many people want your SUV or luxury car right now. SUV sales are down over 43% from July of last year.
Used vehicles, almost always fall in value over time, however according to Kelly Blue Book, the rate of depreciation on large SUV’s over the last year has been about double what is the norm.
You might think that trading your large vehicle for something more economical would be a good idea. The fact that the demand for large vehicles plummeted and the price of gasoline has risen drastically might make for a good argument to trade down to something more economical.
But many experts suggest sitting tight, for a variety of reasons.
There are many things to consider before you get rid of that gas guzzler, it might financially sensible to hang onto it for a while!
How much is that new car going to cost you? How much do you spend a week on fuel now, and how much would you spend if a more economical vehicle was purchased? How much would you spend on a fuel efficient car.
The resale value of the car you own now has fallen drastically, the price of the fuel efficient vehicles has not fallen as rapidly, and in some cases it has risen.
When you figure in the fact that your SUV will only bring bottom dollar, maybe half of what it would have a year ago, and the fact that you really won’t be saving that much fuel, it could take years to recoup your losses!
A 3 year old Ford Explorer, for example, might only be worth $7,000, you might owe more on it than it is worth.
Taking that into consideration, and the fact that small vehicles are selling at a higher value than they were a year ago, that $10 a week you save in gas might seem pretty insignificant.