Be a Contrarian--Buy an SUV

June 5, 2008
Since I wrote a book on HUMMER four years ago, I've always harbored the notion of actually owning one. I don't really have a use for it other than vanity, and might put only 5,000 miles on it a year. At $50,000, though, the H2's been totally out of reach.

But now might be the time to buy one, according to the tons of ads I see on Craigslist for used SUVs--and to the Wall Street Journal story I pored over on my way to coherence this morning.

The Journal's story about SUV sales points out the paradox facing car shoppers today: SUVs have never been less logical to own, but at the same time, prices have fallen so much for new and used examples that the price of gas is less of a factor.

Discounts are huge, the Journal points out. The Chrysler Aspen pictured here is running an average of $5,000 in rebates; Ford's Explorer with a V-8 and four-wheel drive can be had for less than $25,000. "It is the ultimate buyer's market," longtime auto analyst John Casesa told the paper.

And if you drive it infrequently, the cost of fuel for an SUV might even the equation, putting a Dodge Durango within reach of a Honda Civic in operating costs--as long as you don't drive it too much.

So far this year, SUV sales are down more than 20 percent and probably are headed further south since a big batch of crossovers such as the Honda Pilot and Ford Flex are hitting the market. The question becomes, are they set to fall even more? Ford's pricing moves on the F-150 suggest it's going to get a lot more aggressive to dump SUVs and trucks before the new model year comes. If it's cheap now, how cheap will it be in September?

For sure, if anything happens this summer to boost gas prices above $4 a gallon--a hurricane, an invasion, maybe even a sneeze from Ahmadinejad--SUVs will become even bigger showroom pariahs. And pariahs come cheaply.

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