The price of gas is rising to $5.00 and beyond, yet sales of large SUVs are up in the double digits.
In terms of increase, the Infiniti QX56 (above) has been leading the pack, with year-to-date sales up 29.6 percent! How do you figure that? It is easily the ugliest new car on the road; it’s a “dressed-up truck…ultimately assembled from Nissan’s mainline parts bin”; it handles like a pig and costs $75,000 as tested. The new Toyota Land Cruiser starts at $78,000.
The continued popularity of luxury SUVs never ceases to amaze. Sales of big trucks and SUVs were up about 15 percent in February, so the rising cost of gas doesn’t seem to be a factor.
The major reason, in my opinion: “The wealthiest 20% of Americans account for the major share of new vehicle spending, and are less affected by gas prices.” There is not only pent-up demand for these big cars; they are part of the American dream. They symbolize power and wealth. $5.00 gas may end the party for these cars, but don’t bet on it.
Now, most readers of this blog might not salivate over a Cadillac Escalade, but if you like bling and captain’s chairs and a 9,600-pound towing capacity for your boat, it’s a good choice. If you like well-built big cars with a value proposition, look elsewhere. Consumer Reports had little good to say about it.
Escalade sales have been slipping a bit, so GM has dropped the price of the top-end Platinum models. Act now, and you can drive away in a front-drive Platinum for $79,945, or $82,495 for an AWD model. At this level, the additional $995 destination charge shouldn’t be a problem.
Lincoln is offering a $3,000 cash incentive or 0-1.9% financing on the Navigator, which may be the only reason it has sold 1,473 of them this year. The truck has not been redesigned in five years and looks awful. You’ll get about 14/20 mpg, if that makes any difference, but a lot of luxo-tech. Prices start around $58,000. You could buy the Ford Expedition, a very similar car, for nearly half that.
Bottom line: People don’t make rational decisions about cars—or about much else. Most economic predictors are generally behind the curve, because they can’t or don’t factor in the inherently emotional and culturally influenced manner in which people buy cars. We can track these decisions in terms of product preference, but it’s very tough to predict them.
Luxurious land barges are part of the American dream. Do you agree?