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.
A sticker for a Ford F-150 truck. Oddly, the sticker includes an estimated annual fuel cost based on gasoline at $2.80 a gallon.
The fact is that not many people want your big vehicle right now, if Friday’s new auto sales data are any indication. Total S.U.V. sales were down 43.3 percent this July from a year ago, according to Autodata, an automotive information services company in Woodcliff Lake, N.J.
As for used vehicles, while they almost always fall in value over time, Jack Nerad, executive editorial director and executive market analyst at Kelley Blue Book, says that the rate of depreciation on large S.U.V.’s over the last six to eight months has been about twice what is normal.
Given the plummeting demand for big vehicles and the rise in gas prices that is responsible for the market turmoil, it is probably tempting to ditch your own large vehicle and trade down to something smaller.
But many experts suggest sitting tight, for a variety of reasons.
Here are some questions to consider if you are tempted to get rid of your gas guzzler, and some tips for figuring out whether it may be more financially sensible to hang onto it for a little longer.
WHAT IS THE TRUE COST OF A TRADE-IN? If fuel prices are behind your urge to drive a smaller vehicle, here is what you need to consider if you own a bigger one that you want to get rid of.
First, how much does fuel cost you now, and how much would it cost with a new car? Then, how much could you get for your old vehicle — and how much more money would you need to come up with to acquire a new one?
Philip Reed, senior consumer advice editor at Edmunds.com, was on the tennis court a month ago when a friend asked him what he ought to do about his Ford Escape S.U.V. “I said, ‘You probably don’t want to hear this, but your best thing is to keep driving it,’ ” he said.
Mr. Reed and his colleagues huddled to come up with a way to help consumers do the math, and the result is the new “Gas Guzzler for Gas Sipper” trade-in calculator at edmunds.com/calculators/gas-guzzler.html.
You select the vehicles in question, your location, the local price for gas and the number of miles you drive a month, and the calculator tells you how many months it will take for the fuel savings to equal the money you would need to acquire the new vehicle.
The calculator may actually underestimate how often it makes sense to hang onto a gas guzzler, since it does not account for sales taxes or the immense hassle of having to deal with all of the registration paperwork.
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