New data shows used SUVs, pickup trucks declining in value as gas prices rise

Publish date: Jul 24, 2008

According to the most recent AuctionNet data released by the NADA Used Car Guide, a major market shift driven by high fuel costs and low consumer confidence has resulted in a declining average wholesale price of used sport utility vehicles (SUVs), pickup trucks, crossover utility vehicles (CUVs) and vans. The results, which are representative of the second quarter 2008, also show that used passenger car prices have increased during the same time period.

"Fuel prices continue to be the dominant factor in resale values," says Terrence W. Wynne, director of editorial and data services for the NADA Used Car Guide.

"Within NADA sub segments, we estimate that for every $1 increase in gas, large pickups decline in value by $2,200, on average," he adds. "By contrast, for intermediate compact cars, a $1 increase in fuel costs lifts resale prices by an estimated $980. These estimates do vary on younger and older vehicles."

The data reflects a continuing shift in demand by consumers and automobile dealers to more fuel-efficient vehicles as gas prices climb and consumer confidence falls.

Used pickup truck and SUV prices led the declines, with wholesale prices falling 11.2 and 9.6 percent respectively on 1-to-5 year old vehicles. They were followed by CUVs and vans, with values falling 3.8 and 3.0 percent respectively.

Used passenger cars were the only segment showing price gains, up 3.5 percent, driven largely by strong demand in the compact and midsize segments.

As a result, the $3,500 price premium that SUVs and pickup trucks have historically held over passenger cars has diminished significantly. Pickup truck prices have fallen to levels nearly equal to passenger cars, while the gap is closing between SUVs and cars.

The median age of SUVs for sale at auctions increased by more than a year to 42 months from 29 months in the April, May and June quarter compared to the first three months of the year, indicating a continued migration out of this segment and more consumers trading in older SUVs.

Wynne pointed out that the NADA Used Car Guide is responding by making "fairly aggressive" devaluations of SUVs and pickup trucks through the end of this year. "It is evident that this is a long-term depreciation trend as opposed to volatile, near-term price behavior," he says.

For more information about NADA and its used car guide, visit the group's Web site.