The Cost Of Gas; How Long Can You Hold Out With That Large SUV? What Is Your Breaking Point?

By
Real Estate Broker/Owner with Van West Realty - Greenville, SC Realtor -Short Sale Expert! BIC #69041

It's an interesting topic, filled with endlessly differing opinions, depending on who you talk to. Will the cost of gas go up, down, stabilize, etc.???

I realize that all things are relative and those who have relatively fuel efficient vehicles may very well feel the pinch, especially if they were already living on a very tight monthly budget.

However, for those that happen to own large SUV's or large pick-up trucks (for whatever reason) are arguably feeling the pinch more than anyone else!

Having said that, I'm wondering if people have certain "breaking points" in mind whereas they throw their hands up in the air and say "that's it! I'm done! I'm out!" and they attempt to sell off their large SUV or large pick up.

Is that breaking point based on the cost of a gallon of gas? Psychologically, how could it be? I mean...who buys "a gallon of gas"???

Is that breaking point based on the cost to fill up your tank from the point of being empty? For me, the answer is definately the cost of filling up from the point of being empty. I recall feeling like such a fool the first time it cost me $100 to fill up my Yukon XL. That was a couple months ago!

At what point do you say "enough already!" and get out of the large SUV? At $150 to fill up? At $175 to fill up?

I like to have faith that all this is a bad dream and that prices will come back down. Call me crazy, but I like to stay positive and I do take note of historical trends and cycles which support my theory.

However, when Ford and General Motors announce plant closures and scaling back of large SUV's and large pick up trucks...that seems to tell me that "maybe they know something that I don't know". These are some powerful corporations with a great degree of inside information and foresight related to their own industry. To ignore their actions seems equivalent to me sticking my head in the sand and crying "no, it isn't true!"

The other ugly side of the "breaking point" is whether or not I could even sell my Yukon XL if I wanted to. When I drove that pig off the lot back in 2003, it had a sticker on the window that read something like $44,500. Now, I got a substantial family discount and a significant tax break under the "farm equipment" bill passed for small business owners at the time, and...I paid off the balance on 0% financing. So, I did pretty darned good overall!

However, by my research, it appears that I would be lucky to sell it now for between $12k and $15k. Perhaps even between $10k and $12k.

One word comes to mind: PATHETIC!

I mean, I've owned 4 Honda motorcycles, a Honda Civic sedan, a Honda V6 Accord sedan and I currently own a Honda Odyssey van. Not one of those Hondas "fell like a rock" in terms of depreciation. I'm sorry, but if this is what "buying American" gets me...you can have it!

So, what's your breaking point? How much will you have to spend to fill up the gas tank on your large SUV before you throw your hands up in the air and say "that's it! I'm out!"

????????????

 

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depreciation
gas prices
resale value
fuel economy
large suv
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Rainmaker
1,085,646
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

It will be the cost of doing my job. I'll hold on till it hits 8 bucks a gallon. Then I'll have to get creative.

Jun 23, 2008 03:42 AM #1
Rainmaker
719,371
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

There is a point where you have to say "do I really need the big truck every day?" I know I am considering adding to my "fleet" and getting a 3rd car. We dont need the big truck every day, but I also need the truck for towing boats etc...   It is getting to the point that it is making sense for the 3rd car.  But I am not happy with the alternatives. It is scary how few cars there are that get over 30 mpg... Have you looked?  it is a small list that get anywhere near 30 city, or even a combined city/hwy.  I dont think it makes sense to do for a car that gets in the 20's I would need to see mid 30's at this point to justify. 

On a bright note. Now is probalby the time to buy if you need a truck! I bet you can get one cheap now.

Jun 23, 2008 03:51 AM #2
Rainer
9,227
J. Brandon Roberts
Reveal Property Inspections - Clarksville, TN

My next vehicle will be a diesel truck that I will convert to run off of used cooking oil.  Free fuel and eco-friendly advertising potential!

Jun 23, 2008 03:53 AM #3
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2,440,297
Steve Hoffacker
Steve Hoffacker LLC - West Palm Beach, FL
Certified Aging In Place Specialist-Instructor

Gas is only one part of being in business. I wish it was still less than a $1 a gallon but it isn't. It might get there again some day. If it does, I'll stock up. Why do some people pay more rent than they need to just to be in a nicer area?

Jun 23, 2008 03:58 AM #4
Rainer
42,692
The Entire Team of Price & Company Professionals
Price & Company Realty - Myrtle Beach, SC

During the high times of real estate, I was required to purchase a new SUV for new community sales - and because of the tax benefits, I opted for one that weighed over 2,500 lbs.  Fortunately for me, now that gas has gone through the roof, I'm about to pay off the truck.  One expense for another... I guess that's how it goes.

Jun 23, 2008 04:00 AM #5
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Kirk Westervelt

Kirk Westervelt, Broker In Charge, Van West Realty - CDPE - Short Sale Agent - Home for Sale - Greenville, Simpsonville, SC
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