By Sara Kehaulani Goo and Dan Morse
Washington Post Staff Writers
Terry and Sherri Ward bought a brand-new Chevrolet Tahoe for $32,000 last year. It is jet black, 6 feet tall and 16 feet long with leather seats and power everything. Great for hauling the kids. Great for Sherri Ward's job as a real estate agent.
"You can sum it up in a word," she says of pulling up in a Tahoe. "Image."
That image is starting to lose some of its sheen thanks to rising gas prices. On a recent stop at the pump, Terry Ward got some sympathy. "I know it hurts," a fellow motorist told him. The Wards are trying to sell their Tahoe, hoping to buy something more fuel efficient, perhaps a Chrysler Pacifica, a vehicle that's a cross between a sport-utility vehicle and a station wagon.
With gas prices in the Washington area higher than most places in the country, many drivers of the least fuel-efficient cars are especially feeling the pain and are looking to downsize to a vehicle that gets more than 15 miles to the gallon.
But selling an SUV may also be a pain. Sales of the largest General Motors and Ford SUVs have plummeted in the past year. Car dealerships in the Washington area and around the country are flooded with used SUVs they find difficult to unload. SUV owners are finding that their cars are depreciating quickly, mostly because manufacturers offered steep discounts on new models, causing the older ones to fall in price.
The resale values of the biggest and most expensive SUVs are dropping the fastest. A 2004 Ford Expedition, a monstrous vehicle with three rows of seats, has dropped nearly 10 percent in value, or $2,400, since the beginning of the year, to $22,200, according to Kelley Blue Book. The company said a 2004 Hummer H2, a smaller version of the wide, four-wheel-drive military vehicle, was worth $41,700 in January. Its current value is $39,000, a loss of 6.5 percent.
"Used SUVs are down more than normal" in value, said Kelley spokeswoman Robyn Eckard. "You can get a really good deal on a 2003 or 2004 SUV right now because prices have dropped so much."
Nearly 60 percent of shoppers said that gas prices have either changed their minds or strongly influenced their purchase decisions, according to Kelley Blue Book, which reports a 13 percentage-point increase from a month ago, the highest increase on record. Similarly, car shoppers now rank fuel efficiency as the 23rd most-important factor in what kind of car they will buy, up from the traditional ranking of around 35th, said Art Spinella, who tracks car-buying trends at CNW Market Research.
The shift away from SUVs, which has been happening gradually over the past seven years, is now permanent for certain kinds of buyers, Spinella said. "This gas price run-up has effectively cooled any desire for buying an SUV for a fashion statement," he said. "A good two-thirds of people were buying them not to carry people or things around."
John Rentz, of Gaithersburg, said he likes to tease his co-workers about the big trucks they drive now that he has switched to a hybrid. A few months ago, he and his wife traded in their Ford Explorer for a Ford Escape hybrid, a smaller sport-utility vehicle that gets 25 miles to the gallon. "I do have feelings of efficacy," he said. "One of the reasons we bought the Escape was to symbolically state that I've had it with our relationship with Saudi Arabia. I'm for lessening our dependence on foreign oil."