[W]holesale prices on big SUVs such as Chevrolet Tahoes, Ford Expeditions and Toyota Sequoias are down 17% from a year ago. Full-size pickups have fallen as much as 15%…
The reason, obviously, is that soaring gas prices are souring car buyers on the big guzzlers. When a gallon of gas was cheaper than a cuppa joe, size and power seemed like nifty luxuries. But with gas nudging $4, the luxuries have become albatrosses.
There’s absolutely no reason for “I-told-you-so’s” here. Cars are the second largest purchase most people ever make, next to their homes, so rapid depreciation will be a serious hit to a lot of families. Still, there’s not all that much to be done: SUV owners, whether they knew it or not, were making a bet that oil would stay cheap for a good, long while. It didn’t, and they’re paying the price for a bet gone bad.
The only thing that we can do, collectively, is to stop assuming that oil will be cheaper in the future than it is today. Maybe it will be; but the experience of the last 8 years suggests otherwise. Still, despite price hikes that outstripped most predictions, there are all sorts of decisions—from what kind of cars to buy, to what kinds of neighborhoods to build, to what kind of transportation investments we should pay for—that are being made under the tacit assumption that gas prices will come back to earth.
That’s a risky bet. Just ask someone who’s trying to trade in a Toyota Sequoia.