SMALL CAR STAMPEDE

Even on used market, big trucks go begging

In mid-May, a customer visited McRee Ford in suburban Houston looking for a fuel-efficient car. He wanted to trade in a 2008 Ford F-250 diesel pickup he had bought for $53,000 just three months earlier.

Dealer Mitchell Dale shopped the truck with his wholesale buying sources. The best offer: $35,000. Dale said the customer kept the truck.

"The prices dropped so fast," Dale told Automotive News. "At the auction, with heavy-duty trucks, you used to get all the money. Now you won't even get a bid. It's just amazing."

For used vehicles as well as new ones, rapidly rising fuel prices are causing consumers to shun big trucks in favor of smaller cars and crossovers. As sales of gasoline-thirsty used vehicles have slumped, so have their prices.

In March and April, used full-sized pickups such as the Ford F series sold for an average retail price of $18,431, down 5.6 percent from the year-ago period, according to J.D. Power and Associates' Power Information Network.

At the same time, demand for used small cars is driving up their prices, Power said. Basic compact cars, such as the Toyota Yaris, sold for an average retail price of $10,039 in March and April, up 7.3 percent from the same months of 2007.

Worth less
One Texas customer saw the value of his new Ford pickup plummet in 3 months.
 Price
2008 Ford F-250$53,000
Super Duty
diesel bought
new in February
  
Best wholesale$35,000
offer for same
vehicle in mid-May

Dale said he knows dealers who no longer accept big SUVs and pickups as trade-ins. Although Dale still takes large trucks in trade, he said he can't offer customers the allowances he once did.

"It has to be within reason, knowing what the market is," Dale said.

Some automakers are offering special sales incentives to move certified large used trucks. For example, through July, Toyota Division is offering 2.9 percent financing nationally on certified Tundra pickups and Sequoia SUVs. The certified program's finance rates usually vary by region.

"The full-sized truck and SUV market is a challenge segment now," said Norm Olson, sales operations manager of Toyota Certified Used Vehicles. "Our dealers and our customers need this kind of support."

Some skeptics suggest the used-vehicle market may be overreacting to changes in fuel prices.

Tom Kontos, executive vice president of customer strategies and analytics for the vehicle auction company ADESA Inc., said current bargain prices for used trucks could compensate for higher prices at the pump.

Said Kontos: "Consumers should be made aware that if they were ever in the market for a used SUV or pickup, now may be the best time to buy one — even with higher gas prices." 

You can reach Arlena Sawyers at asawyers@crain.com

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