Dealers Overstocked with SUVs

Washington DC April 28, 2008; The AIADA newsletter reported that as gas prices pass $3.50 a gallon nationally and the economy teeters on recession, both independent dealers and massive chains like AutoNation Inc. are having trouble selling used SUVs.

Used SUV sales in March were down 14 percent nationally compared to last year, according to MSNBC. 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 of J.D. Power and Associates.

One option to reduce inventory is to sell the SUVs overseas. At AutoNation's Maroone Nissan of Pembroke Pines, southwest of Fort Lauderdale, used car sales manager Julio Cardoso noted that he has three SUVs headed to Russia this month.

Dealers "always have a decision to make and that is, 'Do I lower my price enough to move the vehicle off my lot today, or do I hold on to the vehicle another month and hope that someone comes in willing to pay enough money?'" Denove said.