Crossovers not providing the MPGs people want, so they're going back to SUVs
Hm, this is an interesting little twist. BusinessWeek's David Welch has written an article about SUVs that might come across as slightly counter-intuitive. It seems that many used-vehicle buyers are once again in the market for large SUVs, even though gas prices and crude oil prices are steadily increasing. Overall, SUV sales are still suffering, but Welch has found that people who shunned SUVs a year or so ago now miss the carrying capacity they once had. The smaller crossovers many turned to just aren't cutting it and don't provide enough of an improvement in the miles-per-gallon category to convince drivers to stay with the mid-sized CUVs.
Ricky Beggs, the vice-president and managing editor of Black Book, told Welch that "People don't like the high gas prices. But they have decided that they need the vehicle." I'd love to see a study that digs deeply into this concept of "need." I certainly don't dispute that some families fit best in a large-ass SUV, but I'm guessing that many people could downsize and deal with it just fine (contrary to Welch's article). I could probably head out to the highway right this moment and spot a lot of SUVs cruising around with just one (or maybe two) people inside. Any readers who have downsized (or upsized) want to chime in?
[Source: BusinessWeek]
Reader Comments (Page 1 of 3)
Gary 12:57PM (11/28/2007)
I need an SUV. At least that's what I thought until I finally bought a fuel effecient car. Now when I need to "haul" stuff I rent the truck from Home Depot for $20 for an hour. Most of the time whatever I'm hauling is stuff I bought there anyway. And the couple of times in the last 5 years that I couldn't rent a truck I just paid the $50-$100 for delivery. In both cases it was something I couldn't hauled myself anyway.
Total rental and delivery price for the last 5 years: about $350. Total gas savings... well I went from 15 MPGs to 50 MPGs over the last 80,000 miles. You do the math!
The belief that you need a vehicle like this is, in my opinion, misplaced in a high percentage of drivers. And the few times you did need the extra room or capacity you could just rent something. The gas savings alone would easily pay the few times a year rental fee.
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Kardax 1:06PM (11/28/2007)
I agree with Gary. The majority (but certainly not all) SUV owners who desire capacity haven't figured out the "truck rental" concept for their occasional big loads.
I don't think high gas prices are going to have much effect by themselves, so long as the perceived "need" of an SUV remains.
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Gene Matocha 7:40PM (11/28/2007)
Good post. I'd be curious to know how many of these people "returning" to SUVs are purchasing them as a second, or third, or fourth (in my case!) vehicle. In my case, I "needed" a more efficient vehicle as my daily commute is about to triple, so I bought an efficient VW TDI. But I kept my '74 F100 that gets 11 mpg as my "hauling" vehicle. It's a matter of the right tool, or vehicle, for the job. So it's possible for a family to have their cake and eat it too if they have multiple vehicles. With the increase in wealth in this country over the last few decades, this would be a viable option for many families. And I wouldn't be surprised if the average vehicles per household is climbing. It's ironic that more cars can actually mean better overall fuel economy...but it certainly does for my household.
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steven 1:22PM (11/28/2007)
I for one am quite disappointed in the smaller crossover fuel consumption. It has stopped me from moving UP to one. We are a two station wagon family as kids and strollers take up a lot of space, every day! The cool thing I like best about the current crop of wagons is they can swallow resoanable loads, get good mileage, and still give spirited performance.
I'm waiting for the "3 car seat guy" to chime in on how he is not going to rent a truck for those times that he needs to take all 3 kids to the park. I'm not sure that really is the solution for the majority.
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amg 1:25PM (11/28/2007)
I suspect that it's the "goldfish bowl" phenomenon, where people adjust to whatever they have and then can't imagine how they could live without it, even though they usually could. I'm with Gary; on the rare occasions where I need to haul something, I borrow my in-law's minivan or rent a truck. I'm at the point where if I didn't live in upstate New York, I would probably only use a scooter for daily transportation. That's why I'm excited by the possibility of three-wheeled, enclosed cars becoming available, because those would suit my daily commuting needs just fine. When children come along, I'll be looking for a wagon, if any exist in this country by then.
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bluegreen 1:48PM (11/28/2007)
Well said Gary. I'm of the opinion that most consumer "needs" are illusory. Of the people I've talked to who have right-sized their car from the SUV they previously owned, not a single one misses having the SUV at all. The "need" for a large car is just another manifestation of the broader consumer culture .
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UH2L 1:53PM (11/28/2007)
In the same manner, a consumer sense of "need" often applies to AWD/4WD. In most cases, it's not needed, but it's always less efficient than an equivalent conventional 2WD vehicle. FWD and stability control are all I "need".
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pkuhl 1:59PM (11/28/2007)
Gary did the math and figured it out. Way to go!
If only the rest of the country could manage the same.
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Phil L. 2:01PM (11/28/2007)
steven -
Yeah, I'm the "3 car seat guy". Our minivan works just fine for us - but it's the only vehicle we've got that can handle all of the kids. This means getting the vehicle serviced, etc. is problematic.
We once took the minvan to the dealership for a recall, and had arranged for a rental car at the dealership - and specifically noted our car seat situation.
You guessed it: When we showed up, the large vehicle wasn't available; only a small car. We ended using two cars to get home. Thankfully, we had two drivers; it would have been a different story if my wife had tried to take care of this by herself.
Some details: In our case, leaving the kids at home with a babysitter generally doesn't work. One kid has enough medical/allergy issues that the typical babysitters available simply don't have the emergency medical equipment skills necessary to be left alone with the kids.
Regarding moving stuff: I've discovered that my utility trailer is far more useful and flexible than a pickup truck. It's big enough to handle pickup-truck size loads; I can leave whatever I'm moving in the trailer without tying up a vehicle; I can get the trailer into tight locations (my lawn tractor has a trailer hitch) that I wouldn't be able to get a pickup truck. When I don't need it, it sits in the back yard, not using gas. Plus, there are friends I'll let borrow the trailer that I probably wouldn't trust with a truck (though I've ended up installing a few hitches out of this).
Still, I wouldn't mind a vehicle that's small enough to be an efficient commuter - yet can handle all three kids in car seats on occasion. Many crossovers have the space, but are just way too much the rest of the time and, as this article notes, don't really save that much.
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richardtoh 2:10PM (11/28/2007)
I agree with Gary. The depreciation cost of owning is also substantial. A better use of the fund is to invest it. Advertisers persuade consumers with SUV's power and perceived status. Occasional haulers should compute the costs of owning versus renting before letting their emotion control their decision.
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david 2:11PM (11/28/2007)
I don't understand the SUV thing at all. My VW Passat TDI wagon can haul my wife and I, two kids, and my two 90lbs dogs, plus two weeks worth of camping gear in the rocket box along with our bikes. And when I'm not driving it fully loaded (99% of the time) I get almost 40mpg. Most people would also be amazed at how much stuff from Home Depot I can fit in my wagon. Worse case, if I really needed to fit anything bigger I could rent/buy a small flat bed trailer and tow it with the Passat's 2000lbs towing capacity.
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richardtoh 2:41PM (11/28/2007)
David - you consider vehicle as a mode of transportation and you use it to serve your need - which is what I do also. However, purchasing a vehicle strictly for functionality is rarely the case in real life. Just watch any vehicle advertisements on TV. If everyone buys a vehicle based strictly on practical functionality, automakers would be in trouble.
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Roger 3:08PM (11/28/2007)
Gary - good for you. I wish more people thought like you. I have a feeling that won't happen anytime soon. Here in urban southern California, many trucks and SUVs are just status (Look at me!) symbols.
- Raised, oversize tires, modified loud exhausts, all the bling accessories you can imagine, and not used to haul anything other than a bad attitude.
For those folks that think they need the cargo capacity of the SUV but could really do better following Gary's truck rental example, I wish some of the rental companies (probably not those owned by the OEM truck makers) could put out some commercials or advertisements that illustrate the value of renting trucks for occasional errands rather than buying them outright.
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Dr. Kenneth Noisewater 3:38PM (11/28/2007)
I've been more than happy with my 1987 Merc 300SDL + BMW 1150GS, my only wish is that I could have an S-class-sized station wagon.. The 1987 300TD + class 3 hitch would be great, but those cars in nice condition cost a FORTUNE..
Then again, when the new diesels arrive, maybe the older Benzes won't cost quite so much?
And I'm sorry, I had a Jeep Grand Cherokee, it was fun, but north of 85mph it got squirrely in turns.. And 16mpg? PAH!
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AlexP 4:02PM (11/28/2007)
I downsized, but not in the same category.
I had a station wagon and downsized to an Aveo sedan, I've just got a new job (delivering ad bags) and the Aveo just won't do, I'm trying to get myself in a new Malibu or a last gen Malibu Maxx since going with GM eases the process.
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Tim 4:36PM (11/28/2007)
Gary is EXACTLY right-on!
Now add taxes, insurance, parking, depreciation, repairs and guilt to the cost of the fuel and the picture becomes even more clear that SUV's make no sense for 80% of their current drivers.
That very same thought process can be used to justify Electric Cars. The average family could own 1 or 2 for their primary local transportation needs and rent a “smoker” for “special" occasions like hauling home that piano or taking a weekend vacation.
I think that is what the E-REVs (extended-range electric vehicles) like the Volt will demonstrate. Once these are on the road, their owners will quickly discover that they never use the fuel in their range-extender! So why pay for it, haul it around and service it? Optional 4x4 on the Volt would take even more SUVs off the road as many people only own SUVs for that occasional snow storm.
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Furion 4:51PM (11/28/2007)
In the society we live in, want and need are pretty much interchangeable. In many places it's possible to live without a car at all - still few would do so, because it inconveniences them. Avoiding inconvenience is not a need, it's a want. But who's going to determine who needs what?
So before judging people who buy SUVs on the premise they don't _need_ it, consider your own need for a car. Could you do without a car? So you work outside public transportation and need a car - would it be possible to find a job within public transportation, even if it pays a little less? throwing the first stone and all.. just think for a moment what the real needs are: eat, shit and sleep ;-)
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Tim 5:19PM (11/28/2007)
Furion - I'm all about free market and the freedom of choice. That's why many people who live in cities like New York choose not to even own a car because they are expensive and inconvenient where mass transit is good.
Once E-REVs and then BEVs and are commonplace, many more will discover what a pain their "smoker" truly is for just commuting to work or getting around town.
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Lance Funston 9:02AM (11/29/2007)
Many of the CUVs are very disappointing in terms of gas mileage. I doing my own research I found small CUV type vehicles like the Acura RSX and Mazda CX7... despite a smaller size and aerodynamic shape are delivering average mpg in the 17-19mpg range. Notable exceptions are the RAV4 and CRV (22 and 21mpg), but some of the second tier Japanese makers and Koreans are delivering rather average mpg with their basic engine technology.
There is research to be done, but I would surmise that 20 mpg represents an important psychological threshold for gas mileage. Going from 15 to 18mpg seems hardly worth losing cargo capacity if that is anything of a priority to the user, and probably sending drivers to the next largest size category in SUVs.
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Chris M 5:23PM (11/28/2007)
The interesting thing about this article is it concerns used vehicles. Well, gas guzzlers, unreliable models, and luxury models depreciate much more than average, so some of those really big luxurious unreliable SUVs are going really cheap, and may be snapped up by people on a budget who don't intend to drive them much.
It's like the "welfare cadillac" - it's not that the poor are suddenly rich, poor people sometimes find the cheapest car available might just be a really old caddie.
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