Cars
Wheel and Deal
The average sticker price now tops $30,000. But don't be put off: Smart shopping can save you thousands.
By Mark Solheim, Senior Editor
From Kiplinger's Personal Finance magazine, December 2004
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Fuel-friendlier SUVs
Here's a riddle: If surveys show that high gasoline prices are cooling America's ardor for large SUVs, why do the numbers show that SUV sales reached yet another record high this year? The answer is simple: crossovers -- SUVs built with the body and frame in one piece, just like cars. Crossovers offer a smoother, quieter ride than truck-based SUVs and are more fuel-efficient. For example, with a manual transmission, Ford's four-cylinder Escape is rated at 29 miles per gallon on the highway, compared with 18 for Ford's behemoth Expedition. More typical is an improvement of three to four miles per gallon over truck-based SUVs.
The Best Large SUV, Cadillac's sports-car-nimble SRX V8 ($50,830), is a crossover. And so are most small SUVs, such as the Escape and Toyota RAV4 (our Best Small SUV with a sticker price of $18,990), and most midsize "luxury" SUVs, such as the Lexus RX 330, and the Best Midsize SUV, the Infiniti FX35 ($35,340) and FX45 ($45,840). Notable new entries in the crossover segment include the Ford Freestyle ($25,595) and the Chevrolet Equinox ($23,275).
For those who want an SUV for towing or off-roading, new choices include the Infiniti QX56 ($48,080), our Best New Large SUV; the redesigned Jeep Grand Cherokee ($26,775); and the Best New Midsize SUV, the Nissan Pathfinder ($26,410), which has been reworked from a crossover back to a truck-base. But sales of truck-based SUVs have been flat for the past three years, even with incentives of $6,000 or more that carmakers have been giving up. J.D. Power found that of those shopping for a full-size SUV, 22% reject a model because of gas mileage. There's also an emotional, status-related issue. In many circles, big SUVs, à la the Hummer, aren't politically -- or environmentally -- correct. "If someone pulls up in an oversize SUV to a sidewalk cafe in Laguna, they get booed and hissed," says Charlie Vogelheim, executive editor of Kelley Blue Book.
But gas prices aren't high enough yet to make buyers flock to the most fuel-efficient cars. On a typical driving vacation, an extra 50 cents a gallon works out to two fast-food stops for a family of four, says Paul Taylor, chief economist of the National Automobile Dealers Association. Other analysts say only sustained pump prices of $3 a gallon or more will force buyers to change their behavior in any great numbers.
Hybrids and diesels
In some niches, though, interest in conserving fuel is already intense, as evidenced by demand for the Prius and a strong showing by Honda's Civic Hybrid. Early sales of the Ford Escape Hybrid are also good, and by the end of the summer, there were already some 9,000 orders for the new Lexus RX 400h Hybrid, which won't arrive at dealers until late winter.
You'll see more hybrids, too. The Honda Accord hybrid sedan will be at dealers in early December, and a Toyota Highlander hybrid SUV and Nissan Altima hybrid are expected for the 2006 model year. Although you pay a premium for hybrids -- typically $3,000 over a similarly powered gas-engine model -- Uncle Sam gives a little of that money back. Legislation signed into law in October sets the annual deduction for hybrids at $2,000.Another fuel-conscious option is a diesel. Diesel-fuel prices now rival those of regular gasoline, but a new generation of engines, called clean diesels, typically burn at least 30% less fuel than gasoline engines with similar power. (Until even more stringent standards are met, in 2007, diesels cannot be sold in California, Maine, Massachusetts and Vermont.) And you pay less of a premium over conventional powertrains than you do with a hybrid. Mercedes-Benz has a new diesel version of the E320 ($49,795) that costs just $575 more than its gasoline-engine sister, and the Jeep Liberty now comes in a diesel model (about $21,725) that's about $1,000 more than its counterpart. Volkswagen extends its line of diesels with the Touareg SUV TDI (a pricey $58,415) and Passat TDI (starting at $23,935).
Michael Blake puts as many miles on his new Passat GL TDI wagon in two months as most people log in a year. "I run fairly hard -- 80 to 85 is my highway cruising speed, and I'm getting 35 to 36 miles per gallon," says the 48-year-old resident of Plainfield, Ill., who crisscrosses the U.S. for his business. "It's a torque monster," he says. "You get to a hill, and it knows nothing about slowing down. I personally think that it seeks out mountains and takes them on as a modest challenge before breakfast." The Passat diesel costs $200 more than its gas-engine sibling.