For owners of large SUV’s that guzzle gas, getting out of their existing loan can be a burden.  Reports are flooding in around the Country of dealerships either refusing to take large SUV’s as trades or instead offering such low prices that trading is impractical.  The reason for this - high gas prices.  Consumers are shying away from buying large trucks and SUV’s and opting for more fuel efficient vehicles; consequently the value of these vehicles is dropping. Some recent reports show large SUV’s dropping more than 25% in value in one year.  Part of the problem facing owners of these large vehicles is gas, part is the lack of consumer demand, and finally, part is the over supply. In the past 10 years - large SUV’s and Trucks have dominated the automotive landscape.  This over supply coupled with lower demand accelerates the drop in value.

So here’s the real world situation. A friend of mine has a Suburban with a payment of $800 a month and is also paying $800 a month in gas.  Trouble is, if she trades in her vehicle, the negative equity is $15,000.  So she is stuck, right?

Not necessarily. Some people are choosing to purchase or lease a second vehicle for commuting around town and driving to work and keeping their large SUV for weekends and lifestyle needs.  A second vehicle, for instance a Honda Accord has a Nationally advertised lease deal of $219.00 per month for 36 months. $2,599.00 total due at signing.  The price of the lease payment and the cost of gas to run the vehicle is less money than my friend was paying for gas on her Suburban.

Bottom line, like all car deals - you have to look at the total cost of ownership. The payment plus the gas plus the insurance plus the maintenance. And if gas and negative equity are killing you - consider possibly adding a second vehicle.