Forget the many sides of the SUV argument. On one front, resale value, they can't be faulted, says Michael McAleer.
There's no escaping so-called Sports Utility Vehicles . . . as the debate rages over their future, particularly in urban areas, in marketing terms they are ruggedly reliable when it comes to resale, according to the latest GE Capital Woodchester used car survey for Motors.
In the luxury sector in particular, where image is everything and there's little interest in off-road ability, the survey shows that after three years retained value stands at 62 per cent, compared to 49 per cent for equivalently priced luxury cars.
The days when four-wheel-drives were the choice of only the wealthy farmer or country vet have long passed. In the past 15 years sales have grown exponentially and isome instances up to 90 per cent of sales are for suburban domestic purposes. So, they're more likely to cross the Tesco car park than any untamed tundra.
Yet, whatever about social and environmental issues, SUVs remain exceptionally strong on depreciation and demand continues to outstrip supply for the most popular models.
During the 1990s the car firms spotted the enormous demand, however misplaced, for the extra height and perceived safety and increased the variety of models on offer sixfold. Even since 2000 the number of models has increased by almost 40 per cent. There are now distinct segments within the overall SUV market, from small models to top of the range luxury versions.
New prices also reflect the choices, with tags ranging from under €20,000 to well over €60,000 and covering every taste and budget in between.
The SUVs or smaller recreational type vehicles seldom go off-road. Their appeal lies more in stylish appearance and high driving position than off-road capability.
At the larger end of the market, the luxury type 4X4 passenger vehicles also spend a great deal of their life on-road rather than off-road, while in between the standard workhorse in commercial and passenger form tends to have a more balanced application
At the outer reaches, the segments of the market do overlap, but the more popular 4X4 segments could be classified as follows:
MINI-SUVs (petrol or diesel): Strong performers - Land Rover Freelander, Toyota RAV4, Honda CR-V and Hyundai Santa Fe.
The more popular used models in all segments retain a very high percentage residual value that in many cases outstrips equally high profile saloon and hatchback models. New prices range from €17,000 to €45,000, with sales well spread across the range of prices. Used models in top condition sell very well in both petrol and diesel with most models having a better petrol following.
According to Eoin Lynam's marketing director at GE Capital Woodchester: "Interestingly, many of these models are available in both two- and four-wheel drive. On the second-hand forecourt, people would often question whether or not a car had a CD player, but few would inquire whether it was a 'real' 4x4.
"The smaller engined two-wheel drive model probably fairs slightly better in residual value over its more expensive, usually diesel, stablemate."
RECOMMENDATION: Stick to the best looking models and those with the best fuel consumption for strong future residual values. Five-door models tend to out-perform three doors in residual values.
Mid-range 4x4 (commercial or passenger): Strong performers - Toyota Land Cruiser, Nissan Terrano, Mitsubishi Pajero, Isuzu Trooper, Jeep Cherokee.
This is the biggest and longest established sector of the 4x4 market where a large percentage of sales are in commercial form.
Diesel dominates and is by far the biggest seller with significantly higher residual values.
Here used buyers are prepared to pay a premium for seven-seaters and that should be noted when making the choice at the outset, even if you probably won't make full use of the extra seats.
New prices for commercials including VAT range from €25,000 to €40,000 and in passenger form range from €40,000 to €60,000.
RECOMMENDATION; Turbo-diesel are preferable for commercial or towing. Consider potential usage before deciding on Long Wheel Base or Short Wheel Base.
Luxury passenger models: Strong performers - Range Rover, BMW X5, Volvo XC 90, Lexus RX 300.
Style over function is the order of the day here with most models having less seating capacity (five seats) buyers (new or second-hand) typically trading up from a saloon or estate car rather a mid-size or commercial 4x4.
These are true 'Sloane Rangers', purchased almost exclusively for image. The trade-in vehicle is as likely to have been a Porsche Boxter as an Isuzu Trooper.
This segment is very well divided between petrol and diesel sales in passenger form. Generally the specification reflects the high price bracket and engine sizes go up as far as 5 litres.
New prices range from €60,000 to over €160,000. In percentage terms these tend to hold very high residual values (probably higher than for any other segment) mainly because of their relative scarcity, although the nature of the market also creates a bigger spread of second-hand values depending on model and specification.
Diesels generally fare slightly better in second-hand values, but new entrants such as the Porsche Cayenne, with its powerful V8 petrol engine are being snapped up.
In reality, individuals with the purchasing power to buy a €100k luxury SUV won't be too concerned whether it does 15mpg (petrol) or 25mpg (diesel). This continues to apply over the first five years of a vehicle's life. Only after that do diesel residuals impact significantly.
RECOMMENDATION: On re-sale, brand image is most important. Pick the right brand and you will find that spending €100,000 on a 4x4 mightn't be as expensive as it appears.