Archived Story

SUV sales go in the tank
By JENNIFER McKEE of the Missoulian State Bureau

HELENA - The largest car and truck auction yard in the Northwest sits just on the south side of the Yellowstone River near Billings. If you're looking to see how $4-a-gallon gas is putting the hurt on Montana, this is a good place to start.

Big, gas-guzzling SUVs are sitting around for weeks, said Jake Gertsch, a salesman at Auto Auction of Montana. Cars are in short supply and they cost more. There's not a Toyota Prius hybrid in sight.

“I wish I had 50 of them,” Gertsch said. “We would sell every one we can get our hands on.”

Auto Auction of Montana is where car dealers buy and sell cars. Vehicles there are either from commercial fleets, like aged-out rental cars, or they're trade-ins from other car lots that either don't sell or the lot doesn't want.

In Missoula, it's much the same. At University Motors, sales people are taking $1,000 deposits for the Honda Civic Hybrid, which is chronically sold out.

Many buyers are trying to trade in their SUVs on smaller cars, said Brook Smith, a sales associate, but they are in for a big surprise.

“They're selling at 50 percent of book value,” he said, which means a 2007 Cadillac Escalade someone paid $30,000 for last year fetches just $15,000.

The lot doesn't refuse SUVs as trade-ins, Easton said, but “we try to discourage them with ridiculously low prices.”

Most people are opting instead to park the cars for now and get something more efficient for everyday driving, he said.

Such observations are more than just a feeling. Statistics show that as gas prices spike higher into record territory, Montanans are trying to dump their old, less efficient SUVs and trucks, and are buying smaller, lighter cars - or getting on waiting lists for a hybrid.

They're even riding the bus.

Yellowstone County is the state's largest auto market, according to state motor vehicle information, and accounts for 14 percent of all cars sold in Montana.

By one measure, at least, what people are trying to sell there are gas guzzlers. The number of SUVs, pickup trucks and four-wheel drives for sale privately in the Billings Gazette classifieds jumped 23 percent from Memorial Day weekend of 2007 to Memorial Day weekend 2008.

Beau Hedin ran one of those ads. Hedin said gas prices weren't behind the decision to sell his 2003 Dodge Ram Hemi, although he and his fiance were downsizing to just one car: her 2002 Subaru.

But gas prices were affecting his ability to sell it: Hedin listed the truck last year and had “tons” of calls on it.

“To be honest, I haven't had that many now,” he said.

Greg Gustafson at Billings' Prestige Toyota said the waiting list for a Toyota Prius, the country's most popular hybrid car, has doubled in recent weeks. Prius sales in Billings are up 50 percent, while sales of the Tundra full-size truck or the Sequoia SUV are down a couple of points.

There's also a waiting list for hybrid Camry and sales of the small Corolla, which gets up to 40 miles to the gallon, are up as buyers decide not to wait for a Prius to be built and shipped from Japan.

Gustafson's lot is getting so many “big old SUVs,” they're not even trying to sell them as used cars; those “great big tanks,” he said, go right to the auto auction.

Selling them can be tough, said University of Montana economist Tom Power.

“It takes time to do and you don't really get rid of them,” he said. “The 5-year-old gas hogs just get passed down to lower-income households. They don't disappear. The burden of operating them gets shifted to people who can least afford them.”

State figures show it's not just car dealers who don't want larger vehicles. An analysis of two of Montana's largest counties - Yellowstone and Missoula - show the number of smaller, more efficient vehicles registered with the state in March was up 39 percent compared with a year ago.

In March 2007, only 46 cars weighing less than 3,000 pounds - about the size of a Chevrolet Cobalt - were registered with the state. By this March, that figure had grown to 64.

(Interestingly, there were twice as many 6,400-pound Hummers registered with the state this year than last, an increase from two to four vehicles.)

“People buying new vehicles are downsizing,” said Dean Roberts, head of the Motor Vehicle Division, where all Montana cars and trucks are registered.

Roberts said lots of people are also buying smaller older cars, like old Toyotas and Hondas, and parking their bigger trucks and SUVs for now.

“They're using them almost like disposable cars,” he said.

Some Montanans are getting out of their cars altogether. Statistics across the state show more people are taking the bus.

The Department of Corrections contracts to run a shuttle for prison workers living in Butte and Anaconda. Between March and May, ridership on the bus was up 23 percent, as gas prices continued climbing.

In Missoula, home to the busiest city bus line in the state, Mountain Line ridership is up around 12 percent this year and on track to hit a record, said Steve Earle, general manager.

“We've had as many inquiries in the last six weeks as we had in the last six years,” he said. “I'm going to attribute 90 percent of that to $4-a-gallon gas.”

About 20 times a day, Mountain Line buses are now so full of passengers, it's standing room only, Earle said.

The new bus passengers include families with children, senior citizens and people commuting to and from work.

“Everybody that had been getting back and forth from the store and the library are all of sudden tremendously interested in finding a way to do it for 85 cents,” he said.

Earle said he thinks the days of cheap gas may be over for good and that people who turn to the bus are likely to stick to it. Over the past several years, he said, about 85 percent of riders who try the bus for the first time end up riding it long term.

His line is looking at expanding new routes to Lolo, a bedroom community just outside town, along with other expansions.

Bus numbers are also up in Billings, home to the Met Transit line, said manager Ron Wenger. Riders were up 5 percent in the last month alone, he said, which is even more unusual because numbers typically go down in the early summer with the end of the school year and warmer walking weather.

About 70 percent of Met riders are elderly, disabled and students.

“The rest are what we call choice riders,” Winger said. “We're seeing more of the choice riders beginning to take the bus. We hope so.”

So far, no Met buses are packed to capacity, as in Missoula, and Wenger said part of his challenge is convincing Billings residents that you really can “get there by bus.”

“But inquiries are definitely up,” he said, and the bus line is in the middle of revamping its routes to better serve commuters trying to get from one end of the city to the other.

Gas prices are hitting bus lines, too, Wenger and Earle said.

In Billings, the Met's fuel budget has doubled in recent years, complicating efforts to add new or more frequent routes.

In Missoula, the Mountain Line runs on a blend of diesel and biodiesel fuel, Earle said. The biodiesel must be trucked in from out of state, further raising the cost.

The Mountain Line now spends about $500,000 a year on fuel.

“The more people you carry, the more fuel you use,” Earle said. “It's going to be a real challenge.”

Missoulian reporter Pamela J. Podger contributed to this story

 

Families look for ways to cut back on gas

By PAMELA J. PODGER of the Missoulian

Kathy Frisby spends a quarter of her monthly take-home pay on gas, commuting each workday from Clearwater Junction to Missoula.

Alton Kane says his family will take fewer camping trips this summer because of the economic pinch at the pump.

And Kim Powell calls her family when she's driving around town to see if they need any errands run.

Western Montanans are economizing as gas costs consume a bigger chunk of their disposable income.

In other ramifications, gas thefts have slightly increased as fuel prices soar.

And the number of riders on the Mountain Line transit system has risen as drivers recoil from the shock of more than $4 a gallon for higher grades of unleaded gas and at some full-service stations.

Nationally, Americans spent about 1 percent of their take-home income on gas in 2002. But that's risen to about 4 percent these days, according to Fred Rozell, retail pricing director at Oil Price Information Service, a firm that tracks fuel prices, in Wall, N.J.

“There are big upheavals in people's lives in terms of the financial impact of rising gas prices,” Rozell said.

Tom Power, an economics professor at the University of Montana, said people in rural areas “don't blink” at driving long distances.

“It is part of the lifestyle to have a four-wheel-drive or a pickup truck.” Power said. “At this point, at least, we're wedded to vehicles that suck up gas.”

Power said he's surprised the high gas prices haven't caused the U.S. economy to plunge into a recession, as was the case when gas prices soared in the 1970s and 1980s.

“It is going to happen - there are huge amounts of money being drained from our wallets,” he warned.

In Missoula, some scofflaws are pumping gas and running off without paying.

“There are thefts of gas all of the time,” said Missoula Police Sgt. Scott Hoffman. “We typically get between three and 10 a week. There might have been one or two more a week than usual” as gas prices climb.

Others are taking public transit more often, with a 13 percent increase in riders the first quarter of 2008 - from 191,000 to 216,000.

“I think certainly gas prices have a big influence on it,” said Steve Earle, general manager of the Mountain Line. “The trend is for people to go green, reduce their carbon footprint and be more environmentally conscious.”

Commuters are keeping an eye on their gas purchases and trying to budget their take-home pay.

Frisby said she pays about $40 to $50 each time she fills her Toyota Sienna van to go to work at Costco.

“I put it on my credit card to keep track,” Frisby said. “My last gas bill was more than $500.”

Kane, a construction worker who lives in Seeley Lake, said he feels the hit from gas prices every time he fills his pickup trucks, including one that runs on more expensive diesel fuel.

“I think gas prices are out of control,” he said.

Kathy Marcus of Stevensville said she downsized from a Chevrolet Avalanche to a smaller Ford Escape.

She said her family is eating out less to help offset their expenditures on gas.

“My husband and I wanted to go out to dinner the other day, and I said I would absolutely not drive back to Missoula,” she said. “I wish we would get a train system down in the Bitterroot.”

Tom Alsaker, a retired electrical worker from Missoula County, is also more careful about driving into the city.

“I'm planning my trips to town a little more judiciously,” he said, as he filled up the tank of his Chevrolet 2500 pickup.

Lee Hinze, a technician from Missoula, characterized gas prices as “appalling” as he stopped for gas recently at a Sinclair on Higgins Avenue.

“I think everybody will watch their driving habits out of necessity until prices come back down,” he said.

Powell, a nurse practitioner in Missoula who was fueling her summertime wheels of a Nissan 350Z, said she tries to avoid extra trips for errands.

“We don't just jump in and go the way we used to,” she said. “You check in with everyone to see if anyone needs anything.”

David and Cathy Mills of Bakersfield, Calif., stood outside their Teton Homes RV parked in the Costco lot. The couple rented their home and on April 8 started their cross-country travels.

They get about 8 to 12 miles a gallon pulling the RV with a Chevrolet 3500 pickup, “depending on how fast you drive and how hilly it is,” David Mills said. It costs about $200 to $250 for each fill-up.

Cathy Mills said they're economizing by staying longer with friends and family, finding free places to park in the evenings and lightening the load of duplicate items inside their roving home.

“As full-timers, we're discarding things and trying to reduce our weight,” she said. “I gave up my cast iron skillet in Grand Junction, Colo.”

Reporter Pamela J. Podger can be reached at 523-5241 or at pamela.podger@missoulian.com.


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