Trade-In Values Falling for SUVs

If you're considering trading your full-size SUV in the near future, be prepared for a shock.

With rising fuel prices, the value of gas-guzzler SUVs and trucks have been dropping as demand declines. Dealers are no longer interested in paying full trade-in value for such vehicles because they know the vehicles are going to be tough to sell from their used-car lot.

Essentially, here's how it works. In the past, a dealer would evaluate a trade-in vehicle's value based on mileage and condition, and offer the customer a (hopefully) fair price. Now, things have changed. Dealers are making price offers as if the vehicle had higher mileage and was in worse condition to make a lower offer. Customers who have done their homework and have researched trade-in prices with Blue Book or NADA price books will often find that dealers are not offering those prices any longer. Customers often feel cheated and don't understand why they aren't being offered a "fair" price.

The reality of this situation is that vehicle prices, particularly trade-in prices, change with market demand. Market demand can change quickly and be affected by all sorts of factors, including day-to-day fuel prices in the case of SUVs. Dealers stay in business by being aware of such changes in demand in order to adjust prices to compensate for the changes.