1. You won't save enough in fuel economy. As a look at these calculators will likely show you, it takes a long time to break even purely on gas savings when contemplating a trade-in. In fact, the time it takes to break even can last way longer than the useful life of the car you're lusting after, as Nerad discovered when he ran some numbers on how long it would take to break even on trading in a 2001 Chevy Tahoe for a 2008 Tahoe Hybrid. The break-even period a few months ago? 48 years.
2. Your current vehicle may be worth less than you think. Because automakers manufactured too many SUVs and so many drivers are seeking to unload them, there is a huge surplus of used SUVs, which is depressing prices further. "Trade-in values for SUVs are at an all time low, whereas hybrids and fuel efficient vehicles are valued at an all-time high," says Mike Vander Baan of AutoConsign.com in Charlotte, N.C. "By trading in, you'll take an enormous hit and have less to put towards your next car purchase."
Mark Scott of AutoTrader.com agrees, saying: "Since gas prices started going up, the value of larger used vehicles has gone down as more and more people seek to sell or trade them, meaning your used SUV that might have been worth $16,000 last year is now only worth $12,000 to a dealer or in a private sale.
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"How much in gas savings would you have to realize to make up for that lost value?" Scott says. "Or might you be better off holding onto your larger vehicle until the market for used SUVs comes back to some normalcy and some of that value potentially comes back?" If you are serious about wanting to get rid of your SUV, explore sites such as Kelly Blue Book and Edmunds that can give you a ballpark idea of what your car is worth and what it might fetch in either a trade-in or private sale.
SUVs coming off lease are flooding the market, and many consumers in the middle of SUV leases are trying to unload them through lease trading Web sites, says John Sternal of Leasetrader.com, who has seen a 25 percent increase in the number of consumers seeking to unload their leased SUVs. Those interested in assuming leases on these cars are finding some good deals, he notes.