SUV trade-ins are no longer welcome

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MIAMI (AP) — For used-car dealer Ivan Hoyos, accepting a sport utility vehicle as a trade-in is no longer good business.

The only SUV he's offering at Florida Auto Sales and Finance is his mother's red 2004 Mitsubishi Endeavor. With only 21,000 miles on it, he's advertising the six-cylinder vehicle with the online network Craigslist for $13,991 — about $200 less than Kelley Blue Book's suggested retail value. Mr. Hoyos' mom purchased a Mazda 5, a smaller crossover vehicle with plenty of interior room but better gas economy — up to 28 miles per gallon as opposed to about 20 for the Mitsubishi.

"Nobody is buying used SUVs," said Mr. Hoyos, 35, who stopped accepting them six months ago. "The truth is, more and more dealers are staying away from used SUVs and large trucks — It doesn't pay. You can't have a unit sitting on the lot forever."

As gas prices pass $3.50 a gallon nationally and the economy teeters on recession, independent used-car dealers such as Mr. Hoyos and massive chains such as AutoNation Inc. are having trouble selling used SUVs as more buyers prefer smaller, more fuel-efficient vehicles such as hybrids and crossovers (CUVs). Crossovers such as the Ford Edge, Honda CR-V, and Toyota RAV4 have more interior room and more rugged styling than the average car, but with a lighter chassis and generally better gas economy than an SUV.

Used SUV sales last month were down 14 percent nationally compared with last year, according to data compiled by CNW Marketing Research. That follows drops in used SUV sales of more than 8 percent for the first two months of the year, compared to the same months in 2007.

That trend has sent used SUV prices plummeting, giving owners a shock when they try to trade theirs in and find out how little they can get.

"Owners find out they don't have the trade equity they thought they had and are forced to keep their vehicles or come up with a large sum of cash to make up the difference," said Chris Denove, a vice president of the auto information firm J.D. Power and Associates.

David Tivadar has spent three months trying to get fair trade-in value for his 2005 Lexus SUV, which gets about 17 miles per gallon.

He would like to trade it in for a minivan that gets better mileage and can accommodate his baby daughter.

He bought the Lexus new for about $33,000, and said the monthly payments of $465 "would be more manageable if gas prices weren't so high."