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Paying more than MSRP for (new) Hybrids, Depreciation/Value of used Hybrids

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Comments

  • Falconone.......You've a point except for the fact that my Prius payment makes me feel good too...$ 229.00 per month. What say you on a Corvette payment? Are you still smiling? NOT!!! The Prius is a really great "feel good" car and thats important every time I write my payment check. Get my point?
    Railroadjames( Prius Envy is catching on)
    PS I just filled up next to a '78 white Corvette ...The guy was not happy with his 66 buck fill-up. He looked over and said ......Hey! Wanna trade? My reply..."When Hummers fly!! ;)
  • Your casual optimism intriges me. With world demand at an all time high and China & India laying claim to their needed oil demands its going to get interesting to see how the supply gets divied up. I think you're missing the key ......Not enough oil to fill the demand. Russia is also making it known that they too need oil from other sources. Lets see what happens. :P
    Bookmark this item and lets see what things look like a yr from today.
  • falcononefalconone Posts: 1,726
    I think you're right. People should read these discussions five years from now. They'll get a good chuckle when they're riding in their Flintstone mobiles. Railroadjames will be passing them smiling in his marvelous Prius!!
  • JBaumgartJBaumgart Posts: 890
    If you were replying to me, I never said or meant to imply that I thought new 2nd Generation Prius's are overpriced. On the contrary, I think they are a good buy: better looks & performance, more practical, great fuel economy, plus you can now load them up with many "luxury car" options if you so desire. Shoot, I wouldn't be reading this thread if I wasn't interested in possibly buying a new hybrid.

    But my post was specifically on the USED Prius (and used hybrids in general), which I think ARE way overpriced considering how much more you get for very little extra money when buying the 2nd generation model, not to mention the brand new battery pack vs. the 4 year-old one in the example I cited. And I fully realize that the crazy pricing on used hybrids is purely a case of supply and demand. The point I was trying to make was that there is a temporary imbalance with used hybrids right now, driven both by a lack of supply (not many hybrid owners are selling at the moment) and a surge of demand, most due to the sudden surge in gas prices. This in my opinion is causing many people to not think the economics through rationally, and they are all too willing to pay more than they should, just to get on the hybrid bandwagon. Free markets are prone to go through temporary imbalances every now and then - remember the crazy tech stock prices in the late 90's? - but eventually this too will sort itself out as soon as new, lower priced options are introduced to the market.
  • CLARIFICATION....No it was directed to SteveDebbie. You need to notice the info just below the heading to see which thread is being responded to.
    Railroadjames
  • stevedebistevedebi LAPosts: 3,844
    "Your casual optimism intriges me. "

    Hey, I said I'd have to see it to believe it, but not because of supplies. I think that once the Oil companies see they can get away with these prices, they will try and keep the prices higher. A lot depends upon the middle east.

    On a side note, there is an experiment going on in Denmark (or Sweden?) where a guy has this theory that oil doesn't come from Jurassic sources; he thinks it is generated by the earth's internal forces. He just started digging a well somewhere up north to prove (or more likely disprove) his theories. Well, the guys got guts...
  • larsblarsb Posts: 8,204
    I mean, really, how many freakin dead dinosaurs did there have to be to make all this oil ????

    Did one dinosaur produce 1 barrel of oil? 50 barrels? Does anyone know....

    Back on topic, the market for USED HYBRIDS is out of control right now. Dealers and individuals are charging HUGE prices.
  • Over 2 yrs ago I bought a 2004 PRIUS and waited 3 months to the day for delivery. Looking back on the deal, I have to say that I'm surprised that the Prius wasn't more expensive. I really felt it to be a bargan all things considered. I, being an EX car salesman, wasn't about to succumb to the embarassment of not getting a good deal. Today I can truthfully say that the Prius has met all of my expectations and then some. I just wish that more folks walking the ladder would get out and drive one as well as check it out. They really sell themselves. (sounds like an ad I saw recently).
    One surprise bonus about owning this hybrid ......The countless smiles, digs dished out, gas-station conversations, and the cute slogans that keep me grinning.
    Railroadjames(one happy camper)
  • gagricegagrice San DiegoPosts: 29,090
    I just wish that more folks walking the ladder would get out and drive one as well as check it out.

    How do you suggest that can be possible? As long as Toyota limits the hybrids to less than 10k per month that is an impossibility. Toyota has no problem supplying 40k Camry's to the dealers per month. I think Toyota is limiting the Prius supply. You have to be gungho to wait in line to get any car. I would NEVER buy a vehicle that the dealer has the upper hand.
  • falcononefalconone Posts: 1,726
    You can't wave a magic wand and ramp up production on a product that has parts outsourced (mainly the traction battery). Toyota doubled the amount from 2004 to 2005. I think it was even more than double! To even suggest that they are deliberately keeping supply down is unsupported nonsense. If anyone can substantiate such a claim, post a link. Please also post a link with the facts suggesting that the US never landed on the moon while you're at it.
  • So the producers of the traction batteries, knowing they can sell 1 million of those to Toyota every year, still manage to produce only 10% of those.

    Maybe it's a mom and pop store producing those, and they don't want to expand their business... NOT

    You have any idea the kind of clout Toyota has in controlling their suppliers.

    If Toyota REALLY wanted a milliion of those batteries every year, you can bet your first born they would have made it happen !!!
  • larsblarsb Posts: 8,204
    http://www.thebusinessonline.com/DJStory.aspx?DJStoryID=20051006DN003007

    " SAN FRANCISCO (Dow Jones) -- As it seems with most things in the automotive world these days, foreign carmakers dominate the domestics when it comes to resale value, according to a recent Kelley Blue Book study.

    In fact, even as the Big Three lay claim to more than half the U.S. market, only one car built by an American manufacturer -- the 2006 Chevy Corvette -- made this year's list of the Top 10 vehicles in terms of best resale value.

    The survey covers the new crop of 2006 models, excluding low-volume vehicles and those carrying a price tag of more than $60,000.

    The average vehicle, Kelley Blue Book said, retains only about 35% of its original value after five years. The cars garnering kudos on this list keep closer to 50% of their initial purchase price."


    Top Ten:

    2006 Best Resale Value Models
    1. Mini Coop
    2. Toyota Prius
    3. Honda Accord Hybrid
    4. Volvo XC90
    5. Porsche Cayenne
    6. Infiniti G35
    7. Chevy Corvette
    8. BMW 5-Series
    9. Lexus GX470
    10. Infiniti M45
  • stevedebistevedebi LAPosts: 3,844
    larsb-
    I figured you'd find this one. The resale is currently high because of the gas spike, making used Prius more attractive; it is part of a larger trend. Any time dealers can command MSRP or more, the resale is going to be good.

    The question is what happens in 3 or 4 years, when the truth is known about long term reliability - either good or bad.
  • larsblarsb Posts: 8,204
    Well, it you look at the Prius alone, it's a Toyota. Toyotas have ALWAYS held a huge percentage of resale value, because, let's face it, they are some of the finest vehicles made.

    And in the history of Toyota's time in America, none of their finest cars have fallen into a "poor resale" scenario.

    We know from the Canadian Taxi Guy that Gen 1 Priuses went 200,000 km without a decline in performance from the battery, so do we expect Gen 2 Priuses and beyond to be WORSE than that effort? I doubt it.
  • stevedebistevedebi LAPosts: 3,844
    larsb,
    Good points all, but not definitive in my opinion.

    Yes, it is a Toyota, which happen to have a good reputation. (Not with me, but that is another story involving Camry's circa 1995-1997). However, we are dealing with a new technology, and that is what is causing the concern, not the company or it's previous reputation.
  • falcononefalconone Posts: 1,726
    New technology? Wasn't the first Prius from 1997 or so?
  • larsblarsb Posts: 8,204
    The Insight is holding resale VERY well. Edmunds TMV for Dealer retail for a 2000 Insight is $11,504 and Dealer Certified would put that price at $12,524.

    That's a six year old car (model 2000 on sale Dec 1999) and the MSRP at the time was about $20K.

    So that's holding from 57% to 62% of new value after 6 years.

    Compare to a 1999 Toyota Echo 2-dr:

    $8,336

    That car priced new loaded was about $13,000

    That's holding 64% of it's value after 6 years, great for a compact 2 dr car.

    So the Insight, even with the battery, is still holding it's own with the most comparable Toyota car from the same year.
  • gagricegagrice San DiegoPosts: 29,090
    The Insight is holding resale VERY well. Edmunds TMV for Dealer retail for a 2000 Insight is $11,504

    Just to keep this fair and balanced. If the car was the one you brought up with 104k miles on it, he would only get $5930 in trade. If he sold to a private party the best he could hope for is $7500. Even with average mileage in perfect condition trade-in value is $7700. Most people trade in the old when buying the new. I have a hard time believing anyone would buy a hybrid with 100k miles and no warranty, and pay over low book.
  • falcononefalconone Posts: 1,726
    That's tantamount to saying that no one will buy a used car after the 36,000 mile warranty has expired. Your argument holds no water.
  • gagricegagrice San DiegoPosts: 29,090
    no one will buy a used car after the 36,000 mile warranty has expired.

    If you say so. I think the problem with selling hybrids is the higher mileage cars. Following selling prices on eBay for the Prius. The cars selling are not going close to blue book after they have 75k miles plus. Would you buy a Prius with 36001 miles and no extended warranty?
  • falcononefalconone Posts: 1,726
    I would never buy ANY used car. That's just me. Everything we buy today is complex. I bought a Panasonic 50" LCD TV and was smart enough to buy the extended warranty. I already had to replace two defective bulbs. They have extended the warranty even further and redesigned the bulb. Bottom line... every car that is made today is complex. The Prius is no exception. I have comfort in knowing that for seven years I won't have to worry about anything when I do buy my Prius.
  • Okay the question is would on pay more than MSRP and since statistically extended warranties are not cost effective and you always buy them that to me means you are willing to pay more than MSRP.

    If you take the same warranty cost and put it in stocks or other interest accruing assets ,you would actually come out ahead and would then pay MSRP or less. The real bummer is reading all the fine print and exclusions on that extended warranty. However the key new item the HSD battery system is already covered by a manufacturers warranty.

    The Prius may be more complex because of the HSD systems and more software control of the locomotion process. And then there are those nasty Prius software problems that keep surfacing.

    Keep on Truck'n,

    MidCow
  • falcononefalconone Posts: 1,726
    Haven't heard of any software problems lately. I wonder why the media hasn't followed up on it? Oh.. btw... I am paying LESS than MSRP for my 06 Prius and I am getting the 7/100,000 warranty for $985. I'd do that with ANY new car I buy today. If you are keeping it for 3-5 yrs, it's not worth it.
  • The world does not revolve around E-Bay. Lots of other avenues to get the track record of Hybrids. You're right in some ways about being smart on the purchasing of older Hybrids. That much we agree on. I'd like to think that in the event that my hybrid goes beyond its warrantee I'll still do what I've always done & look for a bargan for used parts should the need arise. (and why not?) There are ways to be frugal. I once picked up a radio for my antique 73 Buick Riviera that would have set me back 250 bucks but thru a parts place I got it for 30 bucks. Nothing wrong with that! :shades:
  • gagricegagrice San DiegoPosts: 29,090
    I only use eBay as I have not found any other source of prices paid for used cars. If you know of a source feel free to share with us. Asking price is irrelevant in reality.

    As for parts on the hybrids. I think the Prius II has enough units out that parts should not be a problem. The Prius Classic sold very few in the US and may be subject to high repair costs. Just as the Honda Insight battery is over $5000 to replace. Hybrid repair costs are somewhat unknown, which makes resale value unknown.
  • falcononefalconone Posts: 1,726
    I checked KBB, NADA and GALVES and all of them are in close agreement. They all value the Prius a tad over 20k. I based this on my sister's car which is a 2004 package 9 with 34k miles. I think that's pretty good!
  • larsblarsb Posts: 8,204
    Gary, I have pointed out to you before that Edmunds TMV is based on "REAL SALES AT CAR DEALERSHIPS" and is not a guess.

    It is FAR better than the "all over the board" E-Bay prices. E-Bay is the WORST car buying model known to man.
  • falcononefalconone Posts: 1,726
    Agreed... Ebay is not at all representative of the market.
  • gagricegagrice San DiegoPosts: 29,090
    Gary, I have pointed out to you before that Edmunds TMV is based on "REAL SALES AT CAR DEALERSHIPS" and is not a guess.

    I'm not one to bad mouth our Hosts. I will accept the TMV prices set forth. Will you then accept Edmund's TCO on the same hybrids? If so the TCO for the Prius & Honda hybrids is higher than any of the comparables. The Prius & HCH show higher than average depreciation. Hybrids also show a higher cost per mile over the 5 year period.
  • larsblarsb Posts: 8,204
    OK, granted the TCO for the HCH is 42 c per mile and the EX is 41 c per mile. That can be virtually evened out if you consider gas savings with gas prices where they are and going to be - the higher gas prices go, the more the hybrids pay for themselves.

    The depreciation are estimates, which we know at this time have not yet come true - everyone knows that Used Hybrids are going for astronomical resale value, and that is going to continue for some time.
This discussion has been closed.