Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

SUVs' Surprising Residual Sales Spike

December 5, 2007

Despite high gas prices, demand for used midsize and large sport utility vehicles is surprisingly strong.

While still far below the boom years of the late 1990s and early 2000s, data from Black Book, a division of Hearst Business Media which tracks used-car pricing and resale values, indicate the average resale values for large SUVs are bouncing back from their 2006 low, says Ricky Beggs, Black Book's vice-president and managing editor.

According to Business Week, large SUV residual values jumped to 48.6 percent of their original sale price this year, compared with less than 46 percent last year. That's about the same resale value as midsize cars and compact SUVs.

Beggs says many of the people who dumped their SUVs two or three years ago when gas prices really spiked have realized they need the space they had – so now they're buying them on the used market.

Additionally, consumers have figured out that smaller crossover SUVs that people have now switched to don't get much better gas mileage.

A four-wheel-drive 2008 Chevy Tahoe gets 16 mpg while a 2008 Honda (HMC) Pilot with all-wheel drive is rated by the Environmental Protection Agency at 17 mpg. To the average consumer, the Tahoe costs $2,906 a year to fuel with gasoline at $3.10 a gallon. It's only $170 more than the smaller Honda costs to drive, Business Week reports.

And if oil conservation is the selling point, the Tahoe burns 21 barrels of oil a year, compared with 20 for the Honda.

Check out the BusinessWeek.com slide show to see the best SUVs of 2007.

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