Sunday, May 11, 2008

Now is the Time to Buy an SUV!!

Now is the time to buy an SUV. It costs a lot of money to run with the herd. Since everyone seems to want to get rid of their SUV and buy a small car or a hybrid, then maybe you do too. Remember: the general public is almost always wrong. Be a contrarian! Bernard Baruch said it best: “Buy Panama hats in the wintertime.” Or, paraphrased: When everyone wants something, sell it to them. When they don’t, buy it!” You almost never lose, ask George Soros.

It just makes economical sense. Here’s why.

  1. If you sell your current SUV you’ll probably take a $4000 to $5000 hit.
  2. If you buy a new one, you can probably get $4000 to $10,000 off.
  3. Used smaller cars are up 20% or about $1,500 to $4000.
  4. Even a few newer ones are selling above list.
  5. Hybrids cost an extra $3,000 and more for a comparable car

Now, take these figures and look at the gas MPG’s.

  1. Larger SUV’s get 16–20 MPG. We have a Chevrolet Trailblazer EXT 6 passenger. We got it in 2005 when this fever hit the last time. It listed for $36K and we got $12k off.
  2. Your smaller cars and hybrids get 22-32 MPG.
  3. The average car is driven 12,000 to 14,000 miles per year.
  4. Using 16 MPG (low end) for an SUV, and 26 MPG for the others (mid range), you get about 875 gallons vs. 540 gallons of gas per year usage.
  5. At $4.00 per gallon (unleaded), driving 14,000 miles, the cost of 335 gallons (the difference) is $1,340 per year. That is what you would save getting a smaller vehicle.
  6. Your loss (or savings if you were buying) on selling your SUV or not buying one at a drastically reduced price and opting for a smaller version is at least $6,500.
  7. For this, we won't consider that many SUV’s are cheaper for insurance coverage

Obviously, it would take you almost 5 years to just break even, and in the process you sacrifice safety, comfort, and utility.

If you are single and do little driving or just use a car for commuting, you probably already own a smaller car: no need to change.

I am not actually promoting SUV’s or trucks. We have a small S-10 pick-up which we use more and the SUV less since gas increased so much and really wouldn’t want to give up the things we can do (hauling, etc) that we would have to pay extra for otherwise. Our monthly gas outlay has dropped about 25% because we eliminated unnecessary driving and plan our trips more.

The bottom line: there is a great buying opportunity right now. If you can use it or need it, take it. Don’t let mass hysteria, runaway emotions, or political correctness scare you.

Enjoy life as best you can,

The Hammer

Copyright 2008 Crickard Publishing. All Rights Reserved


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