Large SUV's

[bepperb]

Originally Posted By: exranger06
Originally Posted By: bepperb
Originally Posted By: exranger06

The fact that sales of these vehicles go way up when gas prices go down, and the exact opposite when gas prices go up, show that most people DO have gasoline cost as one of the top priorities.


Is that a fact? Where did that come from? I'd be interested since the reality is the exact opposite. Here's something you might read that really is a fact (you know, ones you can reference back to a reliable source):

As gas crept from around 1 dollar to 2.50 during the late 90's early 00's the sales actually increased as did the stock market:

Yukon/Tahoe sales per year

1998[ 182,590
1999 175,493
2000 206,131
2001 279,573
2002 286,255
2003 285,303
2004 272,732
2005 225,765
2006 232,967
2007 209,687
2008 130,642
2009 102,665
2010 104,456
2011 114,777
2012 96,722
2013 111,804

In the cheapest year of gas prices in the last 10 years (2009) sales of the BOF GM vehicles were the lowest they had ever been. If you wanted to make a fact about this one might say the sales of these vehicles rises as gas prices rise, both a result of the economy as a whole.

Sorry if my facts of vehicle sales and gas prices get in the way of anyone's made up ideas about this topic.

So, you're saying sales increase as gas prices increase? Well that explains sales plummeting 62% in 2008 when gas prices were at their highest.

And all these stories from 2008 about people unable to sell their gas guzzlers because of gas prices were all made up too, eh?
http://usatoday30.usatoday.com/money/economy/2008-04-25-1306896965_x.htm
http://www.cnn.com/2008/LIVING/wayoflife/06/12/suv.irpt/index.html?_s=PM:LIVING
And how the Big 3 were experiencing lower sales of big SUVs during that time too?
http://www.nbcnews.com/id/24896359/ns/business-autos/t/gas-prices-put-detroit-big-three-crisis-mode/

And during these times of high gas prices, fuel efficient cars like the Geo Metro were selling WAY above book value?
http://www.cnn.com/2008/LIVING/wayoflife/05/20/geo.metro/
http://abc30.com/archive/6157817/


Yes that is exactly what I'm saying, if you choose more than the most convenient 6 month window you can find. Pick a decade, or at least five years and take a look and let me know what you find.

The reason SUV sales went down in 2008 is because all vehicle sales went down and because consumer confidence was low. Gas prices being high, low or whatever had nothing to do with it.

This thread only relates to new car sales, or at least the original post did. I'd be first in line to say the used values of these are right in line with gas prices. But there is a big difference between someone buying a new 90,000 dollar Escalade and how gas prices affect them vs someone buying a used one.

People really think someone buying a car that's six figures after tax and title care that gas just dropped 30 cents? How exactly does saving 20 bucks a month help you cover an 1100 dollar monthly payment? And if you're paying in cash why would you even think about it?

 

[bepperb]

Originally Posted By: DBMaster
Here's an experiment for any of you who want one of these vehicles, don't mind buying used, and do not have fuel cost as a top priority.

Wait until gas goes back up again and buy a gently used SUV. I guarantee that the market (resale) value drops substantially when fuel costs are higher.


Why not do the opposite and buy a Prius tomorrow? Remember stories of Geo Metro's selling for 5 grand plus in 2008?

But please, this is a thread about sales of new high end SUV's and a debate over whether their buyers really care about gas prices. The used market is a very different situation.

 

[DBMaster]

^I started the thread. It was just an observation about something I found interesting. Used car lots around here were flush with full-size trucks and SUV's when gas hit $4/gallon. Used small cars were selling for premium prices at the same time. I had my 89 Accord at the time and it actually increased in value for a couple of years after bottoming out. I'm not actually sure that it's about the prices of fuel NOW. It appears to me that it may better correlate to what peoples' expectations are of FUTURE fuel prices.

If you can afford to take a bath on the trade-in value of a gas guzzler you probably should have kept it and just spent more on gas.

 

[bepperb]

Originally Posted By: DBMaster
^I started the thread. It was just an observation about something I found interesting. Used car lots around here were flush with full-size trucks and SUV's when gas hit $4/gallon. Used small cars were selling for premium prices at the same time. I had my 89 Accord at the time and it actually increased in value for a couple of years after bottoming out. I'm not actually sure that it's about the prices of fuel NOW. It appears to me that it may better correlate to what peoples' expectations are of FUTURE fuel prices.

If you can afford to take a bath on the trade-in value of a gas guzzler you probably should have kept it and just spent more on gas.


Well you know for only 28 thousand dollars that Prius will save you 50 bucks a month in gas, maybe 100 if gas hits 6 bucks a gallon. So it makes sense to trade in to something that will save you money in the long term. How many investments can guarantee a break even in just 40 years?

 

[IndyIan]

I'll guess there is some percentage of the large SUV market that is effected by gas prices. 1/4 maybe, not half for sure.
Some people do stretch for these, so when its costing them $150 a fillup, some loose interest in flushing that much money. A $60 fillup starts to sound better!
I wouldn't mind a land barge SUV, but the initial cost seems ridiculous to me and so does the mileage, given the miles we drive. So we get by with what we got and save up for when something practical is available. 6-7 passenger seating, AWD, and 30 mpg is available elsewhere in the world, just not here yet...

 

[Hokiefyd]

Originally Posted By: bepperb
The reason SUV sales went down in 2008 is because all vehicle sales went down and because consumer confidence was low. Gas prices being high, low or whatever had nothing to do with it.


Well, to be fair here, car sales went down in 2008 as well, yes, but not to near the degree that SUV sales did. Consider the Toyota Prius:

2005: 108k
2006: 107k
2007: 181k
2008: 159k
2009: 140k
2010: 141k
2011: 128k
2012: 148k
2013: 145k

Even with a worldwide unintended acceleration scare, the Prius experienced a relative blip on the radar around 2011, and has picked right back up. Prius sales during recession continued at a brisk pace. From 2007 to 2009, the GM SUVs experienced a 50% loss in sales. In the same period, the Prius experienced a 23% loss in sales.

Relative to a car like a Prius, which achieves very good fuel economy, the sale of large trucks saw twice the sales loss over the same period of time...a period of time when gas prices were constantly in the news.

You can also make the observation that GM's SUV sales peaked in the early-to-mid 2000s, which is when fuel prices only began to increase in earnest. The period between 2004-2008 saw steady increases in fuel prices, and GM saw a steady decrease in its SUV sales. Again, a strong correlation. Causality? Maybe.

 

[rjundi]

Of the 6 families(4kids) I know who own a Suburban they also have a TDI VW or Prius as the other car for a run about.

 

[DBMaster]

Originally Posted By: bepperb
...So it makes sense to trade in to something that will save you money in the long term. How many investments can guarantee a break even in just 40 years?


Awesome quote. Hats off to you.

 

[InhalingBullets]

I manage a fleet of 1702 vehicles...from Prius' to F-550's. When factoring life costs(maintenance, tires, fuel, purchase cost) on all the vehicles across the board, the Tahoe has the lowest cost per mile.

 

[fdcg27]

This thread got derailed quickly.
Yes, the Arlington plant does assemble the old-school Chevy SUV rebadged as the Escalade, but the plant also assembles more old-school Chevy and GMC badged SUVs that sell for far more reasonable dollars to those buyers who aren't NBA stars or wannabes.
The significant factor here isn't units deliverd to dealers, often described as "sales". It's the retail prices at which the units are moving and the need for GM to offer incentives to both retail buyers and dealers to move the iron. Back in the day of the UAW's jobs bank, GM had considerable incentive to move units at break-even prices, since the alternative was to pay expensive labor rates to workers just sitting around with nothing to do.
The linkage between fuel economy, fuel prices and sales is direct, but it's more a matter of margins to the manufacturer and dealer than it is a matter of production numbers.
In the summer of 2008, before anyone even realized that our economy was entering a deep and prolonged recession, not just a brief blip, retail prices of SUVs tanked to giveaway levels and pricing on off-lease SUVs at auction resulted in large losses to those makers who guaranteed residuals.
This was also the first summer of four dollar gas.
At the time, as large vehicle prices tanked, fuel efficient vehicle prices actually rose.
Retail transaction pricing is a better gauge of the relative market position of vehicles than are production numbers.
We see this today.
GM isn't pumping out thirsty SUVs because gas is four bucks a gallon and people are begging for them.
They're doing so because people are willing to pay more for one of these dinosaurs at the current price of fuel, as though two buck gas will last forever.
In short, buyers are sometimes stupid and when we again see four buck gas in a couple of years, many of these buyers will be bemoaning their purchase.

 

[wag123]

Originally Posted By: Hokiefyd
It's also true that the first year when fuel prices generally started becoming alarming to many (2008), the Tahoe/Yukon sales saw nearly a 50% drop

It was actually WAY worse than that! 50% down was for the entire year. By late summer, when gas prices hit their peak, full size SUV sales were down 95% which is what prompted GM to announce that they were going to permanently close 3 of the 4 assembly plants that were producing them, and this is in Oct. 2008, well before the bailout and bankruptcy. Used big SUV sales were also in the tank. The situation was SO bad that you couldn't trade one in and CarMax wouldn't buy them. Dealers were taking them to auction and getting ZERO bids for ANY amount of money.
On the other hand, used full sized pickups still sold well because they got very cheap and people who use them for work were still wearing them out and needing replacements. New pickup sales were in the tank which eventually caused a used pickup shortage because people weren't trading their old pickups in on new ones. This brought the used pickup prices back up, eventually causing new pickups to sell again.

 

[DBMaster]

I am actually quite gratified that the thread saw so much activity. I had my own thoughts about what I heard regarding the increased production and wanted to find out what the rest of you thought. I am not disappointed. Many good points and observations have been made.

 

[glock19]

Originally Posted By: InhalingBullets
I manage a fleet of 1702 vehicles...from Prius' to F-550's. When factoring life costs(maintenance, tires, fuel, purchase cost) on all the vehicles across the board, the Tahoe has the lowest cost per mile.


How is that possible?

Relatively high purchase price, relatively low gas mileage, expensive tires, and with a V8 more oil and plugs. Am I missing something?

 

[fdcg27]

Relatively low resale as well.
Bad spreadsheet?
Fleet accounting system sourced from GM?
You're not missing anything.
It's a fable.
If the Tahoe really were that cheap to own, then why doesn't this fleet manager have three of them rather than the vehicles listed in his sig.
After all, it would be cheaper, right?

 

[Spazdog]

Originally Posted By: exranger06
Originally Posted By: Astro14
Originally Posted By: John_K
Originally Posted By: DBMaster
I heard on KRLD this morning that the GM plant in Arlington is working extra shifts and overtime to crank out full size SUV's. Sales have picked up with the drop in gas prices. One of the vehicles they build there is the Cadillac Escalade.

Alas, human beings are incapable of learning from their mistakes. I'm sure gas will NEVER go back up in price, right?


People never learn. Like Colbert said last night "gas is down for a week so sign me up for a 5 year lease on a land barge with the aerodynamics of a brick!"

John


It's not that simple. Not everyone has gasoline cost at the top of their vehicle choice parameters.

The fact that sales of these vehicles go way up when gas prices go down, and the exact opposite when gas prices go up, show that most people DO have gasoline cost as one of the top priorities.


In 2008, when gas prices were near $5.00 a gallon, you could buy a used Escalade for about the same price as a used Prius. Same year, similar mileage. Used Priuses (Prii?) were near 100% of their sticker price. Escalade resale value tanked badly.

If I was to buy a used car when gas prices are low? I would buy a Prius. I bet they are languishing on the lot. Unwanted until gas prices spike again.

And the prices will spike again.

 

[ls1mike]

What this thread and some other on here remind me of lately.

I don't worry about what anyone else drives. I make my own money and buy what I want I am sure the rest of you do too.

 

[bepperb]

Originally Posted By: InhalingBullets
I manage a fleet of 1702 vehicles...from Prius' to F-550's. When factoring life costs(maintenance, tires, fuel, purchase cost) on all the vehicles across the board, the Tahoe has the lowest cost per mile.


This is mind boggling. How can you explain owning a Mazda 3 and a Honda Civic if you really think it would be cheaper per mile to own a Tahoe?

 

[IndyIan]

Maybe GM has some killer fleet deals? Our GM vans at work are pretty cheap to buy and maintain, and have decent resale after 4-5 years, but the gas mileage is abysmal. I suppose if you did 2k miles a year, the van might be cheaper per mile than buying a Prius at full msrp and replacing it in 4 years?

 

[ls1mike]

They have some pretty decent fleet deals. I know you can a bare bones, well power windows, door locks, cruise control, tow package, Four door 4x4 3/4 ton gasser truck for under 28,000 new.

 

[Lolvoguy]

Originally Posted By: bepperb
Originally Posted By: InhalingBullets
I manage a fleet of 1702 vehicles...from Prius' to F-550's. When factoring life costs(maintenance, tires, fuel, purchase cost) on all the vehicles across the board, the Tahoe has the lowest cost per mile.


This is mind boggling. How can you explain owning a Mazda 3 and a Honda Civic if you really think it would be cheaper per mile to own a Tahoe?


I think that statement is only true when considering a used Tahoe vs a new prius