Gas prices affect state pickup sales

Lower demand for used trucks forces steep price discounts

Posted: Monday, June 23, 2008

ANCHORAGE - The price of gasoline has had an effect on Alaskans' love for pickup trucks.

A rising supply of used trucks combined with low demand has forced steep price discounts at car dealerships. At some new car lots, fuel-efficient sedans have taken prime front row display.

State records confirm the status of pickups has slipped in Anchorage. The number of pickups registered in Anchorage declined last year for the first time since 2000.

In 2000, the Alaska Division of Motor Vehicles registered 54,142 pickups in Anchorage. In 2007, even though the number of passenger vehicles kept growing, the number of registered pickups dropped by more than 100.

"People still want trucks but that number is greatly reduced from what it was a year ago," said Henry Diaz, a sales manager at BMW of Anchorage, which sells used cars and trucks.

At Kendall Toyota of Anchorage, where Toyota Tundra pickups have been a top seller, "we're selling more sedans now than trucks," said Paul Moon, the advertising manager.

Prices on used, late-model trucks and SUVs are plummeting to a point where trading or selling them could be a money loser, said Chris Hester, a sales manager at Lyberger's Car & Truck Sales.

Until about two months ago, popular trucks and SUVs would not last on the Lyberger lot for more than a week, he said.

Since then, gas prices have soared above $4 per gallon. It was like "someone flipped a switch," Hester said.

Some people are buying trucks but it's a fraction of the total sales volume, he said.

That creates a conundrum for sellers trying to unload a gas-guzzler. By Hester's calculation, a fully equipped 2007 Chevrolet Tahoe has lost about $4,000 in its value.

"People who (have a car payment and) are trading them in are going to get hit pretty hard," he said.

Diesel truck drivers face the steepest prices for fuel but also some of the best options for cutting petroleum dependency. Some in Anchorage and the Matanuska-Susitna Borough are converting diesel trucks to run on biodiesel or vegetable oil.

Biodiesel is vegetable or animal fats blended with alcohol and other ingredients. It does not require any mechanical adjustments but does require building a processing center for the fuel in a backyard. There are no commercial biodiesel suppliers in Anchorage.

To use straight vegetable oil, drivers must install a new fuel tank and other gadgets. It can cost $2,000 to $5,000, depending on the vehicle.

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