A SUV Proposition

Back in the early 70s during the first gas crisis the market for larger V8 cars went in the dumpster. If you had a Cadillac on your lot, good luck selling it. People were dumping these cars left and right for small cars with little heed to the amount of money they were losing. I mean you could buy a lot of gas for the three thousand dollars you were losing on that LTD you were driving.

Sound familiar?

There was a wholesaler back then that had a wonderful idea. Knowing that The Others have the memory of a gold fish, he gambled that when the gas prices went away and the prices came down, John Q, Public would soon go back to driving the big sleds they had so carelessly dumped only months before.

The guy rented a large fenced-in lot. He took all of his available cash and went around to the dealerships buying very big car he could get his hands on for way back of book. When the lot was full (or perhaps when his money ran out) he sat back and waited. Six months later he made a killing as big cars were suddenly worth big money.

It has crossed my mind that someone with some money and a great deal of testicular fortitude might do the same thing today. It seems to me that sometime in the future, perhaps as early as after the presidential elections, the price of gas will go down, and Americans will once again resume their love affairs with trucks and SUVs.

I’m not going to say that it will be anything like the boom years between 1996 and 2002. I don’t think we’ll ever be able to base our paychecks on Suburban sales again, but I predict there might be a resurgence of sales for these beloved behemoths. Americans still love their boats and trailers, and they need something to tow them. We will still have the soccer moms who wouldn’t be caught dead in a mini-van. If gasoline goes down fifty or seventy-five cents the memory of why they blew all that money on a Prius will go with it.

And someone will make a killing.

Now I will freely admit that I don’t have the money or the testicular fortitude to do what I am suggesting, nor do I think you should fill an empty lot with Yukons or Expeditions. But I am suggesting that if you’re one of the few dealers who hasn’t blown most of your cash just keeping the doors open, you might think of picking up a few SUVs and sitting on them.

I’ve been telling my customers that it’s a great time to buy and SUV, but it’s not a good time to trade one in. I might as well tell them the truth because they’re buried up to their eyebrows anyway. Gas prices may be high, but I still see them looking lovingly at the two Denali’s I have on my lot. All they need to do something stupid and buy one is for something to happen, and if the value of the dollar goes up in the coming months, which might be just the excuse they're looking for.

Am I crazy or what? As the months roll on, it will be interesting to find out if I am wrong or right.


Talk to you later,


David