What goes around, comes around... at least in the retail auto business. A combination of high fuel prices and aggressive incentive programs on new vehicles has conspired to put used SUV prices into free fall. According to industry analysts, the wholesale value of used large SUVs in April was down 4.1 percent over last year, and 4.7 percent from March.
The trend is particularly painful for Ford and General Motors, who sell most of the large SUVs. Because most new vehicle sales involve a trade-in, and current SUV owners are prime candidates for buying a new SUV, declining used SUV trade-in value hurts dealers trying to sell new models.

But wait, there's more. Over 220,000 large SUVs were leased in the 2002 and 2003 model years, and owners are turning them in just in time to further depress the used vehicle market.

The result? Reuters reports a Ford analyst as saying the large SUV market looked set for a double-digit percentage decline in 2006, a bigger drop than the automaker had earlier predicted.

[Source: Reuters]

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