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Are you only considering half your fuel-efficient trade-in options? (like SmartMoney?)

Posted by Sean | Posted under Cars, Contrarian | June 20, 2008

This post at SmartMoney, "Should You Sell Your Gas Guzzler" seems factual, unless you consider the facts they omit or downplay. In making the contrarian argument for SUVs, their whole focus is on used gas-guzzlers vs. new gas-misers, ignoring the very real possibility of trading a used guzzler for a used miser.

(SM = SmartMoney, FR = FinancialRamblings)

SM: "You could lose money by trading in your gas guzzler"

FR: True, but you could gain money just as easily by trading an expensive landyacht for an inexpensive econobox, if money is really the issue.

SM:"Nerad predicts that prices for SUVs will bottom out soon"

FR: Who has a crystal ball for gas prices? Will SUVs even hold their current value if gas rises to $5. What if we have real supply disruption and hit $6?

SM: "…in April, the average SUV took more than 66 days to sell"

FR: Again, who knows if this number will increase or decrease?

Only towards the end of the article does someone mention the option of buying a cheap second vehicle, so people can still guzzle to vacations and CostCo. To me, solutions like that only make sense in the presence of needs, not wants in disguise.

Logically, a lot of utility-vehicle owners have already traded into coupes and sedans… does this mean none of them are going on vacations or to CostCo? Or have they stopped hauling bottled water across town, and started renting vehicles for once-per-year activities?

Maybe gas will go down. Maybe everyone will forget that it ever went up. Maybe SmartMoney will indeed look smart. But if I was struggling with a major vehicle decision right now, I’d want to consider the full range of possibilities:

  • used car vs. new car
  • used car vs. 2nd car
  • used car vs. used car
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