Suzuki's Bland Vitara

If you need a cheap SUV, the Grand Vitara fills the billbut there are plenty of trade-offs

Editor's Rating:

The Good: Low price, off-road capabilities, excellent warranty

The Bad: Mediocre fuel economy, no four-cylinder engine, quality glitches in interior

The Bottom Line: If you really need an SUV, the price is right

Why not consider buying an SUV this summer?

It's not exactly an idea that's on the minds of most consumers, but SUVs may actually make economic sense right now for some buyers. With gasoline prices soaring, SUV sales continue to plummet and manufacturers are slapping big discounts not just on gas-guzzling behemoths but also on some small, relatively fuel-efficient models. When you can buy a well-equipped, four-wheel-drive SUV for $21,000 or less, the low price may offset the extra money you'll have to pay for gas.

The '07 Suzuki Grand Vitara is an example of what I'm talking about. I wouldn't buy one for daily commuting, but the Grand Vitara has real advantages for anyone with an active outdoor lifestyle. It's a rugged, compact SUV that, unlike most of its main rivals, has genuine off-road capabilities. To me, it's an ideal second or third vehicle to use at a vacation cabin or ski chalet, or to tow behind a recreational vehicle on long vacations. It isn't the best vehicle in its class, but it's probably good enough to last a long time and comes with a seven-year/100,000 mile fully transferable warranty that may be the best on the market.

Up Front

The Grand Vitara's price is definitely right, too. The least expensive all-wheel-drive version starts at $21,549 with a stick shift and $22,649 with an automatic transmission. Even the top-of-the-line Grand Vitara Luxury with a moon roof, leather seats, and wood-grain interior trim starts at just $25,649, with all-wheel drive and an automatic transmission. (There's a rear-wheel-drive-only version that starts at just $20,029 with a stick shift.) These are all-in list prices, too; there are virtually no options for which you have to pay extra on the Grand Vitara.

If that weren't inexpensive enough, Suzuki dealers are offering big rebates on '07 Grand Vitaras through the end of August. There's a basic $1,000 cash rebate, plus an additional $1,000 "loyalty" bonus if you already own a Suzuki, and another $1,000 off for recent college grads. Buyers have been getting an average rebate of $1,476, according to the Power Information Network (PIN). Those givebacks have brought the Grand Vitara's average selling price down to a little over $21,000.

Rival small SUVs—including the Ford (F) Escape, General Motors' (GM) Saturn Vue, and the Kia Sportage and Sorento—are also being heavily discounted and currently sell in the same price range. So buyers have a lot of leverage.

At such a low price, the Grand Vitara offers excellent value. It was upgraded as of the '06 model year and is now bigger and has a much nicer interior than the original Grand Vitara, which hit the market in 1999. Even the basic '07 Grand Vitara comes standard with full-power accessories; antilock brakes; traction and stability control; tire pressure monitors; steering-wheel-mounted audio controls; and front, side, and side-curtain airbags. All versions are powered by a 2.7-liter, 185-horsepower V6 engine.

The Grand Vitara's downside is the same as that of other SUVs: mediocre fuel economy. It uses regular gasoline, but with all-wheel-drive it's rated only to get 19 mpg in the city and 23 on the highway (16 city/22 highway under the more stringent 2008 government mileage ratings). In 254 miles of mixed driving, I got 20.3 miles per gallon in a four-wheel-drive Grand Vitara with an automatic.

If you want a Suzuki SUV with better mileage, you have to step down to the smaller, even cheaper Suzuki SX4 all-wheel-drive wagon, which has a 2-liter, 143-horsepower, inline four-cylinder engine and starts at an incredibly low $15,624 for the base model with a stick shift. The SX4 is rated to 25 mpg in the city and 30 on the highway. However, the Grand Vitara is a better-made and roomier vehicle than the SX4.

As with most SUVs, the Grand Vitara's sales have been lousy lately. In the first half of this year, Grand Vitara volume fell 26%, to 10,990 units. However, price discounts helped slow the falloff in June, when sales were down only 11% for the month.

The buyer profile for the Grand Vitara is similar to that of other compact SUVs. The purchaser's average age is 47, and nearly half of them are women, according to PIN. Nearly two-thirds of buyers finance their purchase, while 20% pay cash and only 15% lease. (Like BusinessWeek, the Power Information Network is a unit of The McGraw-Hill Companies (MHP.)

Behind the Wheel

The Grand Vitara's big selling point is its versatility, especially if you go off-road or do a lot of winter driving in the snowbelt. This is a compact SUV, but there's nothing namby-pamby about its capabilities.

The Grand Vitara has a relatively high ground clearance of 7.9 inches. It also comes with a low-range four-wheel-drive option for use in rugged conditions. A transfer switch allows you to choose among three settings: the "4H" setting for normal driving, "4H Lock" to increase traction when you're driving on slippery roads, and "4L Lock" for hunkering down in mud or snow at low speeds. In "4L Lock," the antilock brakes and stability control automatically turn off at low speeds, and torque is increased so you can negotiate steep hills and even do some rudimentary rock climbing.

Maximum towing capacity is 3,000 pounds, plenty for hauling small boats and trailers. The transmission also has a neutral setting that makes it easy to haul the Grand Vitara behind a recreational vehicle without damaging the drivetrain.

In everyday driving, the Grand Vitara has a car-like ride. It cruises along quite nicely at highway speeds, though the cabin is noisier than in most sedans. It's no Ferrari, but it's quick enough for everyday purposes. In accelerating from 0 to 60 mph, I usually had times of around 10.5 seconds in a four-wheel-drive test vehicle with an automatic transmission.

Maximum seating capacity is five, but four is more realistic if all the passengers are adults. There's plenty of legroom for average-size adults in both the front and rear seats, and there's room to slide your feet under the front seats when you're sitting in back. Head space in the backseat is a little tight, however.

The rear seatbacks fold down in a 60/40 pattern and can be rolled up against the backs of the front seats, creating a large cargo space in back. The rear-seat headrests retract easily and pop back up at the push of a button. This makes it easy to retract the headrests and improve visibility through the rearview mirror when there are no passengers in the rear seat.

I have doubts about how sturdy the Grand Vitara will prove to be over the long term. There are too many flimsy plastic parts in the interior, even on the "luxury" model. The plastic rear-seat cup holders, which open out of the back of the rear console, don't seem sturdy enough to last. Ditto for the cover over the rear cargo area. I took it off to put the rear seats down, then had trouble getting it back on, and I don't think the little plastic clips that hold it in place will endure many years' use.

The instrument panel is also made in multiple parts and seems likely to develop rattles and squeaks over time. My test car—which had fewer than 6,600 miles on it—had already developed a dashboard rattle that was quite audible on bumpy roads, as well as a rattle in the ceiling light, or headliner, just behind the driver's right ear. The leather seats on my test vehicle were soft and seemed likely to be durable, but there was far too much unattractive shiny black plastic on the doors and instrument panel.

Buy It Or Bag It?

With gasoline prices so high, there's no point in buying an SUV unless you really need one. But for people who actually need a rugged vehicle with good cargo and towing capacity, you can't beat the price of compact SUVs right now. That's especially true if you won't be putting a lot of miles on the vehicle annually.

Don't buy a Grand Vitara without bargaining hard, though. The '07 Saturn Vue, Ford Escape, and DaimlerChrsyler's (DCX) Jeep Patriot are all selling for under $22,000 right now on average, according to PIN. Even the brand-new '08 Vue and Escape sell for under $23,000 at the moment (the '08 grand Vitara is due out soon, but won't differ much from the '07).

It's a buyer's market, so if your Suzuki dealer won't come down on price, the Ford, Saturn, Jeep, or Kia dealer down the block probably will.

Click here to see more of the 2007 Suzuki Grand Vitara.

Before it's here, it's on the Bloomberg Terminal.