Despite high gas prices that have diminished sales of trucks and SUVs and altered consumer driving habits, it's unlikely that truck and SUV owners will sell their vehicles, says the The New York Times.
The reason behind this is the simple law of supply and demand. With the demand for trucks and SUVs at dismal levels compared to last year, the value of the vehicles has also fallen to new lows. SEMA market research shows that sales of new SUVs have dropped by 46%. The New York Times states that the value of the vehicles, as demonstrated by their trade-in values, has dropped by a third of their value from last year.
What this means for consumers is that they are unlikely to trade in or sell their gas guzzlers for new vehicles. The money saved in gas by spending less money at the pumps by trading in a used SUV for a more fuel-efficient small car is offset by the costs of buying the new car. In other words, consumers are learning that the potential money saved in gas by trading in their SUVs is lost when considering the costs of buying a new car.
Individuals are opting to either make do with their old vehicles or wait until the values of their vehicles possibly recover.
What this means for SEMA members is that while market entry—new purchases of trucks and SUVs—has been down, market exit is quite low. Few individuals are willing to sell their vehicles at such low values. Manufacturers of specialty equipment for these vehicles will still benefit by them being on the road.
For more SEMA market research, please visit www.sema.org/research.