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Is bigger better? Demand soars for trucks, SUVs

Is bigger better? Demand soars for trucks, SUVs

In more than three decades on the job, Scott Adams has never seen his Jeep showroom as busy as it's been this summer.

"We can't keep Jeeps in stock," said Adams, who owns two auto dealerships outside of Kansas City, Missouri. "Once we get 'em, we sell 'em almost immediately."

Welcome to the renaissance of America's love affair with sport utility vehicles. These big vehicles that were blasted during the recession as gas-guzzling behemoths are now the hottest movers in showrooms. In fact, demand for SUVs, crossover utility vehicles and pickups is so strong, trucks are now outselling cars in the U.S.

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"I'm not surprised SUVs and crossovers are so popular right now," said John Krafcik, president of TrueCar.com. "People love these vehicles because they want more space, they like to sit higher and SUVs and crossovers get far better mileage than they did in the past."

When Americans tired of spending extra money to fill up their SUVs' fuel tanks during the recession, automakers revamped their lineups to roll out fuel-efficient small and mid-sized cars.

Soon, pint-sized models such as the Fiat (Milan Stock Exchange: F-IT) 500, Ford (NYSE:F) Fiesta and Honda (Tokyo Stock Exchange: 7267.T-JP) Fit were getting more attention from the press than long-popular SUVs such as the Ford Explorer and Chevy Tahoe.

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Some were even predicting companies like General Motors (GM), where more than 60 percent of sales were trucks and SUVs, would re-establish themselves as companies where cars such as the Chevy Volt would be the primary focus.

But recently, as moderate gas prices and greater fuel economy from the current models have made many realize they can drive a vehicle that's a little bigger without spending a fortune at the pump, the segment has seen a resurgence.

The Environmental Protection Agency, which tracks fuel economy in vehicles, said 68 of the 94 different 2013 model year SUVs sold in the U.S. offer at least 20 miles per gallon, when city and highway driving are combined.

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SUVs and trucks are only expected to become more fuel efficient to meet a new standard that requires automakers' fleets get 54.5 miles per gallon by 2025.

"I call it guilt-free driving," Adams said. "The magic number is 20 miles per gallon. Once we tell someone that they can get more than 20 mpg in an SUV or crossover, they go for it almost every single time."

As a result, four years after exiting bankruptcy, 61.5 percent of the vehicles GM has sold this year are trucks, SUVs or crossovers. Overall, sales of large SUVs are up 19.1 percent this year, according to Autodata.

"Look at the demand for the high-end GMC Yukon, Chevy Suburban or Chevy Tahoes. The average transaction price for those SUVs is $60,000 to $65,000," Krafcik said. "Selling SUVs at that that price, at a huge profit, has not been celebrated because of all the issues GM is facing right now. But if that was happening at any other automaker, we would be calling them geniuses."

-By CNBC's Phil LeBeau

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