Robbed: Buying a hybrid car today
A purchase hard to justify?With $4.00 gas driving my friend Carlos mad, a Toyota Prius seemed like a good idea. That was until he arrived at the Toyota dealership.
First, the dealer told Carlos not to hold his breath regarding his hopes of finding a base Prius anytime soon. So, the $25,000 sticker price on the only available Prius had Carl seeing red, since he had budgeted only $22,000 for the car. Second, as Carlos ran numbers through his head trying to justify the $25,000 price tag, the salesman told him that every Prius and Camry hybrid had a $3,000 markup on top of the sticker price because of demand, which promptly ended our hybrid shopping trip.
And, it's not just Toyota. Most hybrid dealers are sticking it to consumers in every way possible. However, with $4.00 gas prices keeping demand for hybrid cars well above supply, despite the ridiculous markups, little price relief seems possible anytime soon.
Does $4.00 gas justify an extra $3000 markup for a hybrid?
Labels: hybrid vehicle sales, Hybrid Vehicles, toyota prius
posted by Dahcredyns at
7:29 AM
33 Comments:
Carlos should look at buying a used hybrid. If none are avaialable, buy a used toyota corolla or honda civic. If he has a family, then get a used toyota camry or honda accord. Get a model year 2002 through 2004. That way, you save money on the used car, and then you can get a hybrid in 2012 through 2014, when the used car reaches 10 years old.
Not bad ideas, David. Still, even small used cars are now starting to fetch premium prices in the same area. Obviously, the law of supply and demand.
Still, the idea of handing over $3000 to a dealership makes me sick. Maybe its basic economics, but it still makes me sick.
I, too, ordered a 2008 Prius about 4 weeks ago. I placed a deposit. There was no mark-up, but also no negotiation on the price. It was within $200 what Edmunds.com said I should pay. However, here's how Toyota sticks it to its potential customers: On the back of my order, a binding contract, it says that if the manufacturer raises prices, the dealership may raise its price as well. Soooo, here's the new bait and switch: limit the number of Priuses, take orders, hold off shipment, then raise the price. The only thing a customer could do is cancel the order, which few will.
Only in the automobile industry! If I ordered a new tv set from Best Buy and placed an order because they didn't have it stock, they wouldn't dare raise the price. I guess you could say we're over a couple of barrels.
No, the car dealers are not sticking it to anyone. They are getting the price they can, reducing the pressure from buyers. Imagine the filled car lots if the Prius sold for, say, $1,000 under MSRP.
(The previous) Anonymous made a good-faith bargain. If the fine print on the back of the contract contradicts his dieas, he should talk to the general manager of the dealership, and then to Toyota Corp. There's no bait and switch; the fine print was there for him to read. If he didn't, that's his problem. But the main questin is: Did Anonymous have to pay more than the contracted amount, or was there just fine print he didn't like? I will argue that the price of that contract was not raised.
Supply and demand, do any of you think that when someone walks on the lot to buy a Tundra and sees over 100 trucks covered in dust that they are fine with paying sticker.
Hmmm a $3000 markup. That must mean the dealerships are rolling in cash now on the prius that they are lucky to get 15 of a month. I wonder how much money they are loosing with the hundreds of Tundras, Tacomas, 4Runners, and other 4x4 vehicles that are sitting on the lot that Toyota makes them take to get those few Hybrids that they try and sell for as much as possible.
The way I read it, Anonymous will have to pay more than the contracted amount because the fine print on the reverse of the contract says that's what Toyota and the dealership says they can do. He isn't arguing about that but about the fact that Toyota looks like they were holding back cars, getting orders, THEN raising the price while thousands of people were locked in with an order and a non-refundable deposit.
You guys are being unfair... and paranoid. As an autobroker who has been selling Prius for 3 years, I can tell you that in March-April, 2008 you could have had the Prius of your choice for $1000 BELOW dealer invoice. So Toyota cut back on the cars it sent to dealerships. This happened just at the same time that $4/gal caused a spike in demand. Very quickly, demand exceeded supply, and the market reacted accordingly. I assure you, Toyota isn't "sticking it" to anyone, they just got caught with more buyers chasing fewer cars. The market will correct eventually. Just keep in mind it is very difficult to forecast the exact number of cars to balance supply and demand. Sometimes--as last month-- they oversupply the market, and it's a buyer's market, and sometimes, it's the other way around. Don't take it personally. Just figure out what the car is worth to you and wait for your price.
I agree with the last comment. I also sell cars. When you go to the supermarket, you pay the price on the package, but when you go to buy a car, you negotiate for the best deal you can. The price is determined by supply and demand. You can't be willing to push for a discount when the market is in your favor, but then complain about a premium when it is not. That is hypocrisy. As for the people who put up deposits, I am sure they would have backed out or ask for a price reduction if the market had moved in their favor.
ANONYMOUS SAID:
Supply and demand, do any of you think that when someone walks on the lot to buy a Tundra and sees over 100 trucks covered in dust that they are fine with paying sticker.
Hmmm a $3000 markup. That must mean the dealerships are rolling in cash now on the prius that they are lucky to get 15 of a month. I wonder how much money they are loosing with the hundreds of Tundras, Tacomas, 4Runners, and other 4x4 vehicles that are sitting on the lot that Toyota makes them take to get those few Hybrids that they try and sell for as much as possible.
BOO HOO...What do you want me to do? Shed a tear for a dealership and an automotive company that could do just FINE without a $3000 markup or worry about myself where $3000 is a good percentage of my total yearly salary?
That's wrong with this pathetic greed system that everyone wants to call "capitalism"...everything that happens someone has an excuse for it...oh...that's just the way it is....oh...supply and demand...oh....it's a free market.
What a bunch of bullshit and piss-poor excuses for being a bunch of unscrupulous, greedy losers.
One has to be a real idiot to fall for that crap.
By the way, anyone who thinks such a system is a shining example of good economics, just take a look at the pathetic state of the housing system...
The same idiots who were outbidding each other for a home are now probably the same idiots who are bending over at Toyota and Honda dealerships while signing on the dotted line...
Looks like keeping my 4 cylinder Focus and taking the bus to work isn't such a bad idea to save money and fuel after all...suckers!
Somebody still has not dealt with the fact that the guy put down a deposit for a certain price then Toyota raises the price. That only happens in the auto industry. Why is that?
Did the Anonymous who originally posted his complaint actually have the price of his car raised? I haven't seen any response to that. People are assuming the price went up because there was language in the contract stating it was a possibility.
having shopped a little more yesterday with carlos, we found out a few things.
first, if you've bought a car from toyota in the past, its fair to ask for msrp. this worked yesterday.
second, shop around. we called almost every dealership in la county practically, and some dealers weren't yet markeing up. and while most were marking up the prius, a lot weren't yet marking up the camry hybrid.
still, i don't buy the supply and demand argument. if anything, it's poor distribution. anybody in the car business knows that most dealers are being hurt right now, even hybrid selling dealerships like toyota.
at may dealership, last year, the prius was the best selling vehicle, when gas prices were far lower. the interest has been there, and yes, maybe some discounting was required, but not much. likewise, discoutns below msrp are common, but that cost is still a good bit above invoice.
as I took my walk this morning, i re-evaluated the supply and demand argument of hybrid cars in relation to dealer markups.
why is that when the WII was released, for example, and demand far outweighed supply, prices weren't increased? it was simply first come, first serve. then people resold on ebay for supply and demand pricing - not at the retailer or distributor.
the fact is toyota has already raised the msrp on all its hybrid vehicles in the last year - significantly on some, as have most hybrid sellers.
for dealers, however, to add a $3000 mark up sounds fraudulent. i would never go to such a dealer again.
additionally, why is that base prius hybrids have hardly ever been available - my belief is that they aren't profitable enough for dealers. well, does toyota exist for dealerships or consumers?
and toyota better realize that a lot more hybrid fans are now a lot more interested in honda's upcoming hybrids simply because they don't want to deal with toyota's dealerships.
I believe also in the supply and demand...
Many cars are sold in great numbers while others are not.. .That's part of marketing strategies also...
Car or auto parts is also included in the price of the car...
Not all Toyota dealers are "screwing the customer." I just purchased a 2008 Prius for $1000 less than the MSRP - picked up the car on May 23. This was the price the dealership and I agreed on when my order was placed in April, and the dealership stuck to it.
that's great to hear that some toyota dealers have scruples. i know there are many out there, but the bad ones always give the good ones such a bad name.
so the buck stops with consumers, not automakers?
so hybrid consumers have to help dealerships because they sell too many products no one wants? that's the fault of the consumer?
wow.
"No, the car dealers are not sticking it to anyone. They are getting the price they can, reducing the pressure from buyers"
Reducing the pressure from buyers? What pressure? You make it sound as if too many customers are a bad thing?
Gene and George are telling it straight up. In Feb/Mar, Prius' were sitting on lots and by April, $1000 under MSRP was pretty easy (San Francisco/East Bay). I got a quote, but held off because I wanted cheaper. Prius is an ugly car which if gas were cheap, would be classed as economy.
Markups over invoice are a ripoff for the unwary. Only a bonehead pays the markup over MSRP. MSRP already has thousands of profit for dealer. For Prius, that's $2K profit to the dealer; Toyota Corp gets its profit from the diff between invoice and its own costs. Every car buying tip/advice giver (Edmonds, KBB.com, consumers reports) say ignore the dealer markup.
Just bought an '05 Prius with 76k miles in great condition, with leather and JBL stereo for $17k on 05/30/08.
Currently averaging 48.8MPG over the last 300 miles in DFW. Sure beats the heck out of the 17MPG I was getting in my Lexus GS400!
It's not easy, but if you're diligent you'll find one.
I've noticed some good deals as well out there, if you shop around, even in areas close to Southern California.
Also, I often follow Prius sales on E-Bay and there are often good deals to be found, but its all about location.
Guys,
This is supply and demand situation and the dealers have no choice but to raise prices to meet the demand and benefit unfairly. The problem is we are dumb and desperate enough to go for it. Look for other options. Me and my wife were determined to buy a new Camry Hybrid, did our match and research and went out to buy one last weekend and boy were we dissapointed just like the others. We came home dissapointed and that got us thinking other options to fight back, just like we are fighting back increase gas prices. Take ther right logica steps.Some interim solutions are the following -
a. buy a used car that has depreciated,keep the savings for an emergency in your bank,
b. buy a new car but not a hybrid..ie Camry, civic, etc
c. fix and hold on to your existing car for just a few more months ( if possible)as more and more new hybrid models are being rolled out end of this yr and next yr...ie Honda EV, Saturn Vue hybrid...click link and pass arround..http://www.hybridcenter.org/hybrid-timeline.html
Whatever you do, don't rush impulsively to buy a new hybrid paying excessively more than what your budget permits.
Hank J
Prius battery supply shortage
http://www.autoblog.com/2008/06/04/prius-sales-tank-in-may-toyota-blames-battery-supply
In 2007, Toyota had $2,000 incentive on buying a Prius
http://forums.motortrend.com/70/6325937/the-general-forum/toyota-giving-2-000-incentives-to-anyone-who-will/index.html
May 2008 Prius sales are of by almost 40% from 2007, supply problems
http://www.autobloggreen.com/2008/06/04/prius-sales-down-40-in-may-tight-supplies-blamed/
My experience browsing for a Prius in the Southeast
6/14/2008
Birmingham, AL
Toyota of Hoover = $2000.00 markup and they require $500.00 nonrefundable deposit
Birmingham, AL
Serra Toyota = $1000.00 markup (30 minute drive from other dealer)
Greenville, SC
Toyota of Greenville = $0.00 markup and no deposit required
I just purchased a fully loaded Nissan Altima Hybrid. The sticker was $33,500. One dealer, refused to negotiate lower than the sticker, though they were playing games with my trade-in. A second dealer, whom I bought from, gave me a deal that was $2,000 better.
You need to shop around, but there are deals out there.
absolutely, even a fair deal can be found on the prius, but that takes some serious shopping outside most metro areas.
still, i wonder how long those deals will last - not long if gas prices stay high.
also - remember to come back and your Altima hybrid testimonial!
I also work for a car dealership, not a toyota but a honda dealership and although I have heard of non hybrid civic's being marked up as much as $1500.00 and hybrid's as much as $2000.00 the dealership i work for has not. We charge MSRP for these vehicles and it is first come first serve most of our civic's (hybrid or non hybrid) and Fit's are pre selling as we cant keep them in stock. I guess what im saying is not all dealerships are screwing people i think charging msrp is fair because like it or not this is supply and demand.
Heck no they shouldn't be allowed to have that mark-up! The wife and I went shopping for one and laughed at them when they wanted close to $30K for a package 2 w/leather. But, perhaps the most amusing thing was the other salesman who came up during our negotiations and asked "is this gonna happen or can I call the other people?" We reduced our offer price even lower and walked out laughing at them.
If you drive 15K a year that's 750 gallons at 20 mpg (if you're that lucky now).
Let's assume you drive your prius like an animal and only get 40 mpg.
You would still save 1500 bucks a year (minimum)....and that's assuming gas stays at on $4.00 per gallon. Most likely it'll go up.
So, the folks willing to pay the 3k extra will take take, at most, two years to recoup their investment (if they drive 15k per year).
Obviously, some folks drive 30k per year and have the intelligence and skill to get at least 50mpg out of a Prius.
The real answer to all of this is to incentivize an all electric fleet within ten years.
This is WAR folks!!!
In 1941 we STOPPED making new cars on a dime and shifted to building jeeps etc etc etc.
We can do it again!
The tech is here to be free of the internal combustion engine for personal transport all together.
We can make batteries cheaper and better. We can build them to recharge fully in ten minutes using nanotech.
We can have cars that perform better, are easier and cheaper to maintian, last longer and go 300 miles in between charges and that will cost no more than we pay now
We can get to the point where the "motors" are in each of the wheels and eliminate most of the losses of the "drive train".
We can mass produce super strong carbon composites that will be far stronger than steel per pound.
The old fleet needs to be junked and recycled asap.
Bottom line: within ten years we can tell the rest of the world to drink their oil.
There's enough petroleum in the USA to meet the needs of usage where there truly is no substitute....and those are rare instances.
This is the kind of war that no one really loses. Our tech and manufacturing sectors will explode with jobs.
There's no shortage of solar energy to drive all of this. The panels will only get cheaper and more efficient in time and as we mass produce them.
Efficiency and elegance can give us a cleaner cheaper and yet far more enjoyable quality of life.
Imagine the millions of people who WON'T get cancer in the future because we will have cleaned up the pollution out of our environment!
All of this is possible IF the people of the USA actually take over their/our government from the corporations that currently own it.
We still have a fair semblance of democracy; use it or lose it.
Nick Lento
unboughtandunbossed@gmail.com
Love your enthusiasm Nick! To me it seems the technology required to power a new energy paradigm will pay for itself in multiple ways. If the US auto industry had embraced such a path a decade or two ago, bankruptcy wouldn't even be part of the conversation today.
Seems like - as in most of America - it comes down to: "how much can I extract out of the consumer" vs. "what's fair?"
Of course "fair" is a completely subjective term. A consumer thinks sticker price is in the "fair-to-high" range for any vehicle. The dealer...well...the dealer is a dealer. Much like a lawyer, they can justify any statement about "fair".
I had a Ford dealer try to screw me years ago when the new Tbirds came out. Yep...Ford had one hot car on the way. And he was bound and determined to extract 5-10 grand over sticker. I, in essence, told him where to stick his sticker. And I still got my Tbird at sticker...but that's a long story and involves a limtited edition that the dealers couldn't mark-up.
I would suggest doing some math. If a Yaris is 12K less than a Prius, then at $4/gallon you could buy an extra 3,000 gallons. If you could average 30mpg with the Yaris...that's 90,000 miles you could drive the Yaris before even paying for the Prius.
If you've just gotta have a small "carbon footprint" and don't care about money...go for the Prius at a mark-up by all means. Just put it in the category of your $1200 microwave from 1975; your $800 VCR from 1980; your $800 Blue Ray from 2003 and your $600 I-Phone from 2006.
...and I was beginning to wonder about my common sense...
Eric-
A Yaris compared to a Prius? Have you driven both vehicles? There's no comparison.
So, why didn't you buy a Pinto instead of your Thunderbird if its all just about cost?
Anyway, I can get over 60 mpg in LA traffic in a Prius, which is bigger and more comfortable than the Yaris and it offers more features. The tiny little Yaris won't even achieve 30 mpg.
I think you were right to question your common sense in the first place.
So Eric,
If you were diagnosed with cancer and you had to choose between a drug that works 100% and the drug that is half the cost but doesn't perform as well, you'd go with the cheaper drug right?
And before you say it's not the same thing...IT IS. If people realized just how screwed up we are, I doubt you'd be sitting here worring about $3000 per year of savings over 4 years. Is your health more important or your pocketbook?
Evidently, it's the pocket book for most people YET they turn around complain about developing health issues because they were too cheap to eat well and spend money on quality food.
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