Demand for used SUVs and trucks on the rise

HACKENSACK, N.J. – So much for fuel efficiency!

A year ago, with gasoline selling for more than $4 a gallon, drivers abandoned their gas-guzzling trucks and large SUVs for high-mileage compacts. Now, with prices in the $2.50 range, they’re going back to the big guys, at least in the used-car market.

That sharp U-turn in buying habits has led to a 5.8 percent increase in the price of used cars in the past year – including a 16 percent spike since the beginning of the year – and a shortage of the kinds of vehicles drivers were unloading last summer, according to the Manheim Used Vehicle Value Index.

To Richard Fernandez, the Manheim survey confirms what he sees every day at Fette Ford in Clifton, N.J., where he is the senior sales manager. Used car sales are down more than 25 percent from a year ago, and he is unable to obtain some of the most popular models.

“Our used car lot used to have twice as many cars,” Fernandez said. Included is just one Expedition, the biggest and least fuel-efficient in the Ford inventory – and once again, among the most in-demand used cars.

“I can’t even get them,” he said. “No one is trading them in.”

Dealers, who buy most of their cars at auction, have thus far been able to pass higher auction prices on to retail customers, so the increase in wholesale prices has come without downside consequences to them, Manheim said.

“But, the cause of higher wholesale prices does stem from a negative – namely, the significant reduction in potential supply available to the auction industry,” the report said.

The biggest price gains since last June were for pickup trucks (up 27 percent) and sport utility vehicles (25.8 percent), while compacts fell almost 10 percent and midsize cars were off by 3.4 percent.

The index has risen for six consecutive months, reaching a 22-month high.