For SUVs, the Bad News Only Gets Worse

Everyone knows SUVs are in trouble because of high gas prices, but this recent trend also impacts the rate at which they’ll depreciate. This most affects leased vehicles coming back to dealers after the terms expire. Some 800,000 trucks and SUVs are due back at dealers in 2008, and residual values projected when the cars were leased three or four years ago will fall $6,000 short per vehicle, according to CNW Research.

“Ouch” is the word you’re looking for.

Money lenders will be hit hard. Banks, the credit arms of car companies and credit unions will take a $5 billion smack in the face for 2008. A year later, returning SUVs will cost them another $5.29 billion.

The good thing for consumers is they will be able to buy their leased vehicles for drastically reduced prices, although only 20 percent are predicted to do so. Even as SUVs fall out of favor with car buyers, their financial impact will continue to ripple for years.

SUVs: The Hidden Costs (Autoweek)