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Why Are People STILL Buying Trucks and SUVs?
By JLP | May 7, 2008
Although I don’t see as many new trucks driving around as I used to, I’m still seeing quite a few brand new trucks and SUVs out on the road. I don’t understand why anyone would buy anything these days that doesn’t get over 25 miles per gallon.
Think about it, if a truck averages 18 miles per gallon (which seems high to me) and you drive it 12,000 miles per year, with gas at $3.50 per gallon you’re looking to spend $2,333 per year (or nearly $200 per month). If you drive a Hummer H2 that averages 11.5 miles per gallon* and drive it the same number of miles per year as the previous example, you’ll spend OVER $3,600 per year just on gas!
Unfortunately, those who already own large trucks and SUVs are going to have a tough time selling them. Demand for trucks and SUVs has fallen, leaving lots of unsold vehicles on dealer lots. Dealers are offering incentives, which is hurting the used car market. I’m so glad that we didn’t go for a big SUV when we were car shopping 6 years ago.
What about you?
Are you in the market for a car or have you recently purchased a new car or truck? If so, what did you buy and what thought process did you use in making your decision? Did the price of gas weigh in your decision?
*I used mileage numbers from this Wikipedia Hummer H2 page, which lists the H2 as getting 13 MPG highway and 10 MPG city. I took those numbers and averaged them arriving at 11.5 MPG.
UPDATE: I should have mentioned in my post that there are circumstances in which people NEED trucks. I wasn’t trying to imply that no one needs a truck. That said, I have seen LOTS of pickups that NEVER see work! LOL!
May 7th, 2008 at 11:44 am
Well, a lot of people insecurity issues and need to drive something that makes them feel better, or they have to compensate for something they are lacking.
I really don’t care what people drive, since it is a free country and they are free to spend their money as they wish. If getting 12 MPG and spending 60k on a vehicle makes their life bearable, then so be it. But don’t expect me to sympathize with you when you’re on the local news whining about how the cost of gas is hurting your wallet.
It doesn’t make sense to me, but different strokes for different folks. I’m fine with driving my used car that gets close to 30 mpg and has very low insurance premiums. I can afford to buy something that will turn heads, but doesn’t interest me. I just need to be able to reliably get from point A to point B.
May 7th, 2008 at 11:48 am
A truck is more of a tool than a vehicle. I don’t see much utility in an SUV that I couldn’t get in a minivan, but a truck is another story.
My truck is 14 years old, averages 18 miles per gallon, and I’m only just now thinking of getting rid of it because of needing a baby-safe vehicle - and I will miss it dearly when it’s gone. Despite its relatively poor gas mileage, it has probably saved me as much money as I have ever spent on gas.
With 4 of my moves, the truck was sufficient to move everything I owned. To rent a moving van would have cost at least $50 per move. I have hauled literally tons of landscaping materials on my own where having them delivered would have doubled my costs.
I’m betting at least half of those trucks you see driving around were purchased as tools. The owners may need them now for hauling items or have an anticipated need (as was my case) but certainly most of them were not purchased as “luxury vehicles.”
May 7th, 2008 at 11:52 am
I’m all for buying vehicles with better mileage for the environmental reasons, etc… but your missing the point.
What’s an extra $1,300 a year when I’m buying a $50,000 vehicle? What’s that something like $1000 month payment? Not to mention insurance and maintenance and registration…
Your think like a saver, not a debtor which is the “normal” American right now (sad as it is).
The point is… Gas is still cheap, especially for people who only drive 12k or less miles.
Until it becomes more scarce like I can’t pull up and fill up when I want or it becomes ridiculously expensive ($10/gallon) I don’t think people are going to change.
May 7th, 2008 at 12:00 pm
Just this morning, I biked to the bank to get some money from the ATM. This bank only has one ATM set up as a drive-through. I was waiting behind a big SUV. The driver was futzing with the ATM and apparently had been for a number of minutes before it was my turn, occasionally bending awkwardly out of the window and half-open door to do so, because the SUV was taller than the ATM placement was meant for. Of course, the engine was on all this time.
This says to me that gas isn’t expensive enough.
May 7th, 2008 at 12:14 pm
I currently drive a 4 year old SUV. I bought because we needed a “larger” vehicle in addition to my fiance’s 4 door sedan. We take the 4 door sedan almost everywhere and utilize her better gas mileage.
May 7th, 2008 at 12:14 pm
It really depends upon your usage. Unless you’re disabled, it’s crazy to use a gas-powered vehicle for personal transportation, period!
We recently traded in our electronically failing VW Jetta which got about 34 mpg for a large truck (a V8 Nissan Titan).
Sounds crazy, I know. But … we don’t drive in-town, we use our bicycles. We drive the truck maybe 3-5 times/month.
We got the truck because it’s a better fit for our lifestyle - we can put a camper on it since most trips out of town involve an overnight stay.
The savings in lodging outweighs the increased gas cost of travel.
We also are avid gardeners and needed to be able to haul soil, compost, etc.
We can fit a number of mountain bikes, kayaks, etc in the truck which means when we do stuff with friends (more often than not), we take fewer cars and everyone pitches in for gas.
Basically, even though on the surface it seems a little crazy to have a large truck, in the large picture we’re actually driving less, more able to consolidate resources with friends, and spending less on lodging.
And eventually we’ll finish our EV conversion for in-town trips … and then the truck will really be in the specialized role it was meant for.
May 7th, 2008 at 12:28 pm
Four years ago I didn’t puchase a large SUV, instead I purchased something even worse, a hightop conversion van. It averages 14 miles to the gallon. I pay $540 a month on it. I have been trying to sell it, but like you said no one is in the market for a vehicle with low MPG.
What makes it worse is the blue book is about 5K and I still owe 12K becuase of the conversion package. They don’t give you credit for the conversion when trading it in. They only want to give you the value of a plain old van.
I am on baby step two of the Total Money Makeover. We have moved the van to the top of our snowball to get rid of the large payment and to allow us to get a vehicle with at least 30MPG.
Enjoy you blog. Keep it up.
Big Ed
May 7th, 2008 at 12:28 pm
I agree with most of the others that a truck is more of a utility vehicle and probably makes sense in most purchase decisions. If you were to line up mini-vans and SUVs normally the SUVs are nicer which makes them a status symbol over the Mini-Van drivers out there.
Also, add in the fact that insurance crash test ratings are done by something the same weight as the vehicle hitting itself. Liken this to a Chev Aveo hitting another Chev Aveo or hitting a wall. But what happens to that poor little 2531 lb Aveo gets T-Boned by the 5265 lb Chev Suburban? Which one would you prefer your baby seat in? Where’s your 5 star rating now?
May 7th, 2008 at 12:38 pm
One of my coworkers and her husband just bought a luxury SUV for what seems like status reasons to me. Kind of ridiculous, considering they live in the city of Chicago… She told me the other day that they refill the gas tank before it even gets to half empty, just because they can’t deal with paying $100 for a full tank of gas psychologically! I wish I could just say “why did you buy the damn car then?!”
May 7th, 2008 at 12:42 pm
Why buy a truck?
Because you can’t haul 1/2 ton of gravel, dirt, wood, camping gear, motorcycles, furniture, tools, etc (the list goes on) in a mini car OR an SUV.
I agree though - anyone that COMMUTES in a truck must have money to burn. Can I have some?
May 7th, 2008 at 12:43 pm
I bought a Toyota RAV4 last year and fuel efficiency was a concern since I commute 35 miles to work. Even with a 270hp V6, it still gets 23/30 MPG (on the window sticker at least) which is better than many cars. Plus, I get the flexibility of the SUV.
Jon
May 7th, 2008 at 12:55 pm
Hey JLP,
Personally I like my SUV - thankfully its not one of the huge ones or I might not like it as much. I don’t drive a lot any more and when I do its often to go to the boat or a friends cottage which means I need the space.
With all of that said if I were in the market for a new vehicle I would consider something smaller and more fuel efficient (or a hybrid car). The price of gas isn’t likely to come down any time soon if at all. The benefit I can see from this is that more energy and money will be spent to develop alternate technologies and increased efficiency which should have been happening for years.
May 7th, 2008 at 12:57 pm
I just bought a used 2006 Nissan Frontier and I’m currently averaging about 18 MPG (50% city, 50% highway).
I bought the truck because my finance already has a 32 MPG VW Jetta and we are about to move out to Texas from Florida.
Within the next two years I can anticipate 3 moves so a truck was in order.
When we go out for dinner or around town we always take the more efficient car.
I also offset the trucks carbon foot print at http://www.carbonfund.org/.
So at the end of the day I feel good about myself.
May 7th, 2008 at 1:14 pm
I think people “need” large vehicles like they “need” McMansions. There is NO WAY it’s cheaper to own a huge truck than to rent one as needed. NO WAY. Unless you have a business requiring a truck it makes very little sense. It isn’t just the cost of gas, it’s the cost of all maintainance (including tires) and insurance. Safety issues are also illusionary. Until we sat down and ran the numbers, my husband argued the same point. It was pretty obvious once we looked at everything on paper. Educate yourself, do the research.
Those who already own big vehicles are rather stuck: a local car dealer commented recently he’s only offering 60% Blue Book value on SUV trade-ins, while compacts are “flying off the shelves”.
If I had an SUV or large truck, I’d park it, minimize insurance on it, and try to sell on Craigslist.
May 7th, 2008 at 1:15 pm
I have a CR-V and a trailer. That handles 99% of what life can throw at me, and I don’t have to suffer the crappy mileage of big truck or SUV.
May 7th, 2008 at 1:18 pm
By the way, that Buick Enclave that you’ve had your eye on gets an estimated 16/22 mpg. In real life it will be even worse — nowhere near the 25 mpg that you referenced above.
May 7th, 2008 at 1:21 pm
Nickel said:
“By the way, that Buick Enclave that you’ve had your eye on gets an estimated 16/22 mpg.”
Yep. I’m aware of that.
May 7th, 2008 at 1:21 pm
My mom needs a SUV; she can’t physically get in and out of a car. Other disabled people also need them.
But SUVs make awful generic commute cars. A friend of mine now parks his SUV overnight at the train station garage and rides the train to work, using his SUV to get the last two miles to the office.
May 7th, 2008 at 1:53 pm
Unless I’ve missed something, the IRS still has the 6,000 pound vehicle accelerated depreciation for small business owners (called section 179 or affectionatly known as the SUV tax deduction).
Long story short as long as you’re not a chump workin for the man (ie you’re self-employed) you can purchase a vehicle up to $100,000 and take accelerated depreciation..meaning write it ALL off in one year. Gotta luv the tax code.
Would your view of the H2 change if you looked at it like a $50,000 tax write off? Remember with higher income self employered we’re talkin ’bout the fat end of the tax brackets, PLUS reduce your self-employment tax, state tax, city tax anything based on your income.
Also, if you’re making north of $150,000 per year, an extra $30 a week for gas is not even greens fees.
Which looks stupider in your 4,000 SF county club house driveway? A Hummer H2 or a Honda Fit? (I’ve seen a Honda Fit parked in front of a McMansion..the hired help? )
May 7th, 2008 at 2:03 pm
I can only imagine getting one if we needed to haul stuff. I don’t see them as status symbols…at all. I know most people get car payments and debt and everything, so I guess I don’t even see them as a sign of wealth.
May 7th, 2008 at 2:03 pm
Traciatim: Thank you! I hardly ever see anyone discuss safety. Most of the time I see nothing but complaints about SUV owners trying to make up for a shortcoming - wink-wink-nudge-nudge. Safety is a huge concern. We have a Ford Expedition and a Dodge Ram 1500 - both filled with child seats. I will never buy anything but a full size truck or SUV again.
I pay more for gas - but I’m not crying about it. We try to keep the gas bill under control by driving less, using public transportation, and biking (on safe routes).
RJ: I would like to see you back up your assertion that the safety issues are illusionary. Most of the time when I see a story in the local paper about a collision it is the person or people in the car who are dead or severely injured, and the people in the pick-up or full size SUV who had minor injuries. It is easier to roll a large vehicle (center of gravity is higher). But you can prevent rolling by not driving like an idiot in most cases.
May 7th, 2008 at 2:04 pm
We purchased a Tahoe 5 years ago to accommadate the double stroller we needed back then. Now, we are stuck with the painful $80 fill-up every 2 weeks. We will be keeping it and driving it until the “wheels fall off” is what my husband says, but I am eyeing one of those Hybrid Highlanders for our next purchase.
May 7th, 2008 at 2:18 pm
We recently bought a truck (albeit used). We have a number of landscaping projects that require us to haul stuff and we camp as well. There’s no way the landscaping stuff could fit in a car and we prefer not to drive our car off-road and into the woods.
We got a good deal on the truck from a friend and we only got liability insurance on it so our total cost of ownership is pretty low. Not to mention, it’s a 4 cyl so it gets great gas mileage. In fact, several days a week hubby leaves his car at home and drives the truck to work.
May 7th, 2008 at 2:39 pm
We bought a 2008 Subaru Forester in December, and had previously driven a 2000 Ford Escort. The Escort gave us the best gas mileage we’d ever had, but I’ve always wanted something like the Forester, and when we got it, it was exactly what I wanted. Rather than put more money into a car with 130,000 miles on it, we decided to get a new vehicle. The Escort was great for what it was, though, and I got a thrill every time I got gas. Prior to that, we had a Toyota Camry. It did not get any better mileage than our Forester.
I get 19 mpg in the city with the Forester. My husband and I only have one vehicle, and we work where we live. This is the way we want it. Not supporting two vehicles and not commuting would be huge moneysavers for those who do those things, but for us, it is standard. Like everyone else, we have our priorities, and one of them is that when we spend money, we would like it to be for something we want that represents value to us. I would not enjoy buying an economy car if I did not like the car. I’d consider that spending money for nothing.
May 7th, 2008 at 3:00 pm
I live up north, with 7-months of winter snow on the ground. I drove a car while I was in college, but it wasn’t fun. Today, I have compromised by driving a small SVU - Ford Escape, which gives me 18mpg/22mpg city/highway.
May 7th, 2008 at 4:18 pm
You must be from the city
I have horses. And a horse trailer. Horses need hay (25 bales x 50 pounds a bale fits easy in a truck), grain (50 pound each bags), etc. Kinda hard to do with a car.
Now if I were a city slicker, it would be a different story
That’s why people buy trucks
May 7th, 2008 at 9:10 pm
Trucks are for work and obviously some people are going to need them. But others do without. My notoriously cheap sister has 20 horses. She has a 1978 Chevy truck (ultimate gas hog) and an old import hatchback. I’d swear she uses that hatchback for hay, feed, etc more than the truck. The only time I see her using the truck is when she needs to haul the trailer.
I live in the city. I see trucks and SUVs all over the road just transporting one person (who is wearing a suit, not overalls). I know some of those folks are wealthy and really can drive whatever they want, but the rest of us are downsizing. Even at my tennis club, which is notorious for having soccer moms, I’m seeing fewer SUVs and more Camry’s, minivans and the like. Personally I drive a not too efficient sports sedan, but its paid for and I don’t drive that much - so I’m not trading it in.
My husband’s Civic was totaled a year ago. He is not a car guy and had no idea what he wanted. We really had to think about this purchase, because he had no clue what was available. I talked him into a sedan in case we have kids. We went with a Camry. The only factor in the decision was reliability, decent mileage, safety, and a manual transmission (for him, not me). Every salesman was trying to get us into a hybrid, but I just didn’t feel comfortable with that (higher cost and no independant mechanics to work on it). I can’t say gas prices played a huge factor, but we did choose a reasonably sized sedan - a large sedan, truck or SUV was never in the plan.
May 8th, 2008 at 6:34 am
obviously,people are gonna buy what they’re gonna buy…unfortunately, when they don’t consider the longer term and get caught up in more of the “impulse” moment,then the rationale goes right out the window.
the other thing that I find amusing from some conversations that I hear from time to time: people talk about sacrificing(sort of), but they also seem to suffer from ” let someone else suffer first” syndrome…if not anything else,it’s a pretty strong wake-up call to everyone that we have to rethink a major factor in our everyday lives….which is driving!!
There…..I feel better!
May 8th, 2008 at 8:30 am
I have a Chevy S-10 and get around 24-26mpg. Not too bad. It handles 99% of all our “truck related” needs.
I was debating, after the wheels fall my S-10, on whether I want to buy a Silverado, but you can rent full size truck from Home Depot for 75 minutes for only $30. I’ve pretty much settled on a hybrid for my next vehicle, only if the Chevy Volt is not out yet!
May 8th, 2008 at 9:36 am
In reference to #18 about the friend. If it’s only 2 miles, he could certainly ride his bike to the train–at least on pleasant weather days–instead of driving the SUV, saving himself another $1/day in gas) plus wear and tear)and probably getting to park even closer. If he has to pay to park at the train station, then it’s a no brainer. Worth a thought.
May 8th, 2008 at 10:31 am
I guess they can’t see the writing on the wall.
May 8th, 2008 at 11:20 am
I love big trucks… in fact for the last several years I drove a quad cab, looooong bed Ford F-350 with a huge diesel engine. It was just over 21ft long and averaged 15 mpg in town (not bad, given the size).
Alas… I saw the writing on the wall last November and I now drive a 93 Camry (paid cash, thank you very much). I put the truck up for sale in late Novemeber and it took until late March to sell it. I was ahead of the curve and still had trouble selling my truck. I’m glad I made my move earlier than most everyone else.
We also have a paid for 2001 Tahoe. If we need to haul something, we borrow a truck. If the need to haul things gets frequent enough we’l get (gasp!) a trailer!!!
One thing that goes along way with swapping out vehicles is to have them PAID FOR. If you outright own them, it is much easier to sell low if you need to…
Just my .02
May 8th, 2008 at 11:46 am
I asked my friend about the bike option. The problem is he often works from home or goes offsite and has a 40 pound bag of computers & stuff he takes to and from work.
May 8th, 2008 at 3:45 pm
I posted the comment below to a similar question on the Forbes Digital Rules blog. It applies here as well.
SUV’s are not irrational, but I can understand how a writer from Boston would get that impression. Having lived nearly all my years in Utah and Wyoming, I know how useful SUVs are. Back in the old days SUVs were Jeeps, Internationals, 4wd pickups and Suburbans, Blazers and Broncos. They were purchased by ranchers, hunters and fishermen, campers, skiers, boaters, and oil field workers. They used them to get places you couldn’t get in a car, in weather that most people wouldn’t go out in. Those people still need SUV’s and will continue to buy them. If you think that SUVs give you a sense of security in I-405, think about being 10 miles from the nearest pavement in January with a foot of snow on the ground and 10 degrees outside.
In the intervening years SUVs became a fad for people that didn’t really need them. They became a substitute for a minivan or a station wagon or a way to look more macho. The people that bought SUVs for these reasons are the ones abandoning them now. The irrational part of SUVs is someone buying one to cruise the concrete canyons of Manhattan or the freeways of southern California.
May 11th, 2008 at 7:20 am
http://www.gladwell.com/2004/2004_01_12_a_suv.html
Traciatim:
Read the Malcolm Gladwell article PLEASE.
Amanda:
You can say “why did you buy the damn car then!?!?” Just because your co-worker is stupid doesn’t mean you can’t point it out. Stop worrying about how it looks. Who cares? Say what’s there to be said, and what’s there to be said it that your co-worker is stupid.
RJ:
The Gladwell article is for you too, fellow traveler.
Ernesto:
Got all that. However, the one of the biggest traits of the rich is that they minimize unnecessary spending (negotiating prices, minimizing expenses, etc.).
Troy:
You really expect an idiot to not drive like an idiot? Are you serious?
Jay:
Good points. My paid for 2000 Accord V6 agrees.
Sam:
We don’t live in the old days, unfortunately.
All:
Sure, many good points are made here. Generally, trucks have utility functions. I don’t think anyone would argue that. SUVs for the most part are for looks and flawed notions of safety. (And how I drive, my Honda Accord is a bigger threat to your Expedition than your Expo is to me. Bet!)
With my car, I have avoided the most impossible situations that the typical SUV driver could never have escaped. I’ll put money on that. They money I save on gas!
Plus, I started my budget when I lived in Cali 6 years ago, and I still calculate my monthly gas spending based on living in SoCal, even though I have been back in DC for 6 years. Gas prices could triple before I notice it. Literally. I stress test my gas spending at least once a year, then I add a bit on top. And I adjust my budget accordingly.
Its all in the planning.
May 11th, 2008 at 9:19 pm
Like has been said before - buying a truck is not necessarily a “car to drive for everything.” My in-laws have one truck - used to haul things and drive to work (bought used, bought less than blue-book value).
Another friend’s father recently picked up a heavy-duty truck for a third its retail value - because it was a tool to him, not a daily vehicle.
I’ll skip the debates about “better uses for the money” however…
May 12th, 2008 at 11:41 am
I love the quotes about SUVs specifically being used to Haul stuff. My mother whose kids are all grown up recently bought a Mini van because she works on a per diem basis for a text book company running inservices for teachers and needs to haul a lot of materials to them. She looked at SUVs but determined that she could get a lot more stuff in the mini van.
May 12th, 2008 at 3:18 pm
I recently bought a gas guzzlin’ Lincoln V8 SUV. Display tells me I’m getting about 11mpg. And, I live in NYC! So, you all probably think I’m nuts. Nope, I’m not. The roads in NYC are deplorable and I wanted something that could give a very smooth, luxurious ride despite the horrible bumps. I live 6 minutes from work and therefore don’t drive that much but when I do I want to drive something super comfortable. And, I named my price at the dealer.
Look, bottom financial line is this: If the recent increase in gas prices are hurting your everyday life choices then you really need to assess whether you can actually afford a private automobile.
May 14th, 2008 at 5:04 pm
A low-MPG truck is necessary in some instances. My folks live in a rural area. The cost-of-living is very low there overall, but anyone who does not have a truck is hating life during rainy season and all winter long when it snows. And no, four-wheel-drive is not “optional,” but mandatory. On balance, they make up for that cost by near-zero property taxes, cheap land and housing, fresh well water, and so on. If you live in the hinterlands, sure, a truck might make sense.
If you live in the city and have a truck, you had better be using it for work in some way, or you’re just vomiting money down the drain.
Meanwhile, I would have no excuse for buying an SUV or truck. I live in Phoenix, everywhere I travel is paved, and the weather is not a problem. As such, I commute to work on the Rapid (a commuter express bus) and I use my ten-year-old Honda Accord 4-cylinder ricerocket for everything else. It’s so cheap to keep and maintain and use at this point that friends of mine have taken notice and are actively searching for decade-old Hondas and Toyotas as cost-saving vehicle options. I highly recommend it to others… monthly insurance is $55 for two drivers, you get 450+ miles per tank of gas, and the v-tec H22 engine is known to perform like new year in and year out.
May 24th, 2008 at 2:44 am
What, you haven’t lost faith in humanity yet? Just lose it, already… People are dumber, and more ignorant than ever. IQs are dropping, and being “gangsta” is the new cool.
Just get it over with- stop caring… it will just drive you insane.
June 10th, 2008 at 12:58 pm
I see many people say they like driving big trucks and SUVs becasue of their large size which they believe equates to safety. Enjoy them now, becasue the federal government is seriously considering regulating the maximum size of ALL non-commercial vehicles. This is due for several reasons beyond the fuels savings. Our roads are congested with lots of vehicles with no end in sight to adding more to our nation’s roads. Making vehicles smaller will minimize overall congestion, and reduce wear and tear on the infrastrucure caused by larger vehicles. The federal government does not have the capability to repair our roadways beyond what we are doing now. Heck, the government can not even begin to make necessary repairs to what we already have. While this is in the specualtion stages, many on capital hill are really beginning to push this “maximum size” non-commercial vehicle size. Basically, F-150s will be more the size of rangers. If actually pursued, I am sure there will be “grandfather clauses” so people who currently have traditional big trucks and SUVs can keep them.