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Discussion Starter · #1 ·
Good time to buy a gas-hogging SUV?
By Peter Valdes-Dapena, CNN/Money staff writer

Sure it'll cost you more in gas. But with dealer discounts and incentives, you'll save much more.

NEW YORK (CNN/Money) - Gas prices have gone north of the $2 mark, and could head higher still. So, naturally, it's time for Americans to end their love affair with massive, gas-guzzling sport/utility vehicles, right?

Not so fast. If you were thinking of buying a big SUV -- and don't care what environmentalists think of you -- there's not much reason to change your mind now.

Yes, the recent run-up in gas prices will hit your pocketbook. But at the same time that gas is rising, so are incentives on the biggest SUVs. In fact, the savings at the dealership should more than make up for the extra fuel costs, at least over the relatively short term.

Take the GMC Yukon XL, which gets about 15 miles to the gallon in combined city and highway driving, according to the Environmental Protection agency.

Driving 15,000 miles a year at $1.60 a gallon (the average as recently as February) would have meant annual fuel costs of about $1,600.

At $2 a gallon, the annual fuel cost would be $2,000, an added expense of $400.

But these days, General Motors is offering $5,000 in cash incentives on the Yukon XL, $2,000 more than it was offering in February.

If the equation were that simple, GM's generosity would cover your extra fuel costs for about five years.

There are some complications to keep in mind, however.

First, remember that rebates do come at a cost. Every dollar of that rebate acts like a pebble tied to the resale value of your car. The bigger the rebate, the faster the vehicle's resale value sinks.

But cars that have poor resale value for other reasons are most affected by rebates, said James Bell, director of sales for IntelliChoice, a company that tracks long-term ownership costs. The good news for SUV buyers is that those vehicles tend to hold their value well, said Bell. The GMC Yukon XL, for example, is rated among the best in its class for retained value.

"Your best move is to look at how particular vehicles are doing in the market," said Bell. You'll get the most out of a rebate with a vehicle that depreciates slowly and that you keep for a long time, he said.

If you want to use that rebate to offset your fuel costs, warns Bell, avoid pouring it back into expensive options, a common mistake.

Smart optioning can also save you money on those gasoline bills, he added. Passing on the 4-wheel-drive option or the bigger engine can save you money in your monthly payment and at the fuel pump.

Full Article Here


Premium Member
14,692 Posts
Discussion Starter · #14 ·
Originally posted by SUPERBADD75@May 22 2004, 02:35 PM
my advice to you is buy a Prius or Civic hybrid. what are you going to do if gas prices stay where they are, or even increase?
Why not an Aveo? He'll save 10,000 dollars of the price of a pricey one-year wait, MSRP if your're lucky Prius or Civic hybrid, AND get good fuel economy.

Ah, "must choose Toyohonda....must not deviate!" :p

The Civic Hybrid is MSRP: $19,650 - $20,800, and the Prius is over 20K. Beside the recent news that Hybrid drivers aren't getting nearly the advertised fuel economy, the 10,000 difference with an Aveo is going to take a LOOONG time to make up with fuel economy savings.

This debate reminds me of people who complain about ATM fees, but don't even look to see how much the federal government is draining from their paycheck every month.

If the issue is saving gas AND saving money in general, a car like the Aveo hatch makes a lot of sense. To look solely at the price of gas and ignore that a Civic hybrid costs twice as much is silly. Might as well just get a plain old Civic and put your extra money in the bank, or and Echo - if you must go the Toyohonda route.

No, this "Prius is the best" argument is for environmentalist greenies, and techno geeks who want to show off (but strangely were absent when GM had the EV1 out). It just doesn't make sense otherwise.

Personally, I think a lot of SUV buyers are buying IMAGE, not sense, and would be better off in more fuel efficient minivans and cars like the Malibu Maxx -- but then again the Hybrid buyers are buying an image, too, not common sense.
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