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Paying more than MSRP for (new) Hybrids, Depreciation/Value of used Hybrids
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I don't blame the local dealer for adding $2K onto the price *although I resent the fact that they didn't decide that six months earlier). It's what the market will bear, so it's not any different from me getting a nice raise from my boss because he can't find anyone else that does my job as well as I do. Or Sean Penn getting $10M for making a movie.
I like the idea of using less gas and polluting less, but if someone else wants to save the environment, it's the same result. My current SUV is just as comfy as the HH will be so I can live with it for a while longer.
Good luck on your GS hybrid.
Acutally skid control is misunderstood, especially on FWD like Hondas. WQithout it on FWD you don't trun but plow forward, not near as dangerous as RWD. With RWD the rear end can swing around and can completley change your direction, very very dangerous ( iff you are going too fast for the sterring radius and road conditions). Yes, skid control is benefecial on RWD espeially since turning into a skid, like manual transmissions is becoming a lost art.
Cru'sn in 6th :shades:
MidCow
This statement is only true for typical cars. Let's say you want to buy a camry- if the dealer offers MSRP, then with a little effort, you can either haggle or go to the next dealer and get $XX off MSRP making the above statement true. but as long as there are enough people willing to pay MSRP (or more), then there's no amount of "negotiating" that will allow you to pay less than MSRP.
Secondly if people want to pay MORE than MSRP, then let them. there has to be some way to allocate these cars. let's say there are 1,000 cars available this month and there are 10,000 people who want to buy it. How are you going to determine who gets it? a random lottery? if dealers don't use waiting lists, then what's wrong with using price as a way to distribute the cars? are all those private people on ebay selling RX400's for 5-10k above msrp corrupt? or are just using free market?
and lastly MSRP is just a number. let's take the rx400 again. if the hybrid option was $10000 making the MSRP $56000, but the dealer discounts the car $2000 making the total $54000, which is still $4000 more than the current msrp, is that a good deal because there's a "$2000 discount" and you got the car "way under MSRP??" That just depends on what you think the car is worth at this time.
There are hundreds of thousands of good cars, some hybrids, that are not being gouged. I think it is best to walk away and buy something else rather than buy into a planned corporate shortage. If they start losing sales to other auto makers they will get on the stick and meet demand. The insanity is thinking that the resale value is in any way based on the selling price of a car. Look at invoice then knock a couple grand off the price and that is what the car is really worth.
I don't think we have to "avoid" certain overpriced cars to get manufactures to lower their prices- the market will take care of that. As the number of people willing to pay "higher" prices are taken care of, as competition grows, prices will come down. For the rx400 for example, this may take 3 months or it may take 3 years. If this is the car you want, and you don't want to take part in the corporate gouging, I suggest you wait an appropriate amount of time. At some point demand for this car will shrink, and we'll see discounts on the car.
My point is that there are always people willing to spend lots o' money on the "latest and greatest." These folks, often called early adopters, are willing to put up the cash (think of plasma tv's). I say let them pay the high prices and let manufactures who take the risk of bringing these items to market enjoy a little payoff. If the technology and demand pan out, eventually you will see a hybrid at your price point. If it doesn't, then you were smart not to have jumped in too soon.
In the case of hybrids it's tuff to work the game plan but the more info the better. Remember this.... If the car is worth the price, does anybody lose? I think not. I also know that I've owned an '04 PRIUS with 22K and nary a complaint. I paid MSRP and to this day I got a bargan. Nuff said!
Culliganman(A Happy Camper)
He said, that if trends continue, the resale value will exceed most other cars. His example was that people that own a 2003 and 2004 Toyota Prius can resale their cars AT or VERY NEAR current MSRP. In fact, he mentioned that he has had customers call and tell him that they had been offered more than MSRP from other people to sell their car.
Bottomline, I am trying to figure out if paying upwards of $8000 more for the hybrid would benefit me (already know it benefits the environment). Bottomline, I can afford both vehicles, albeit, I NEVER thought I would spend 40K on a car much less a 50K vehicle!!!
So, the overall question is...if someone with a loaded 1-2 year old Prius were to sell the car right now...how much depreciation should they expect??? The edmunds guide is helpful, but I would like the real scoop. Only a few more hours til I meet with the Lexus saleman again. Thanks.
http://katu.com/consumernews/story.asp?ID=76981
Perhaps it's the conspiracy theorist in me, but I suspect that Galves is printed, under the auspises of dealer associations, with the dealer's profit more in mind than reality. That's why the dealers use it.
I don't know if the dealer's claim is necessarily true (there may be a period of 6-12 montths where this MAY hold true). I do beleive the resale value of an RX400 will be similar, perhaps better, than a RX330, in terms of percentage. so if you sell your car in 4 years, that $8000 difference in new price will translate to approximately $4000 difference in used prices. so if you're saving $800/yr in gas (based on your statement above 10 years for $8000), times 4 years, that's $3200- so you're out $800. You're statement that you can afford either vehicle leads me to beleive you're in the upper tax bracket, so you'll save about $700 in taxes next year, so it's almost a wash.
Is anyone leasing their RX400? I'd be curious to see what the residuals are compared to a RX330.
It will make sense, gas milage wise, to buy a hybrid when the payback period is down to about 2 years and we're past V 1.0 of the technology.
Other than the Prius, all of the rest are at the "gee whiz" stage currently and don't make sense economically to most folks.
The people who are making a statement with a hybrid are exactly the people that don't care much about their economic viability - because next year there'll be another car to buy with which to make a statement and they are no where close to getting back savings that hybrids are supposed to offer.
I don't think that is the issue. There are at least 28 non hybrid cars that are rated PZEV. Most are selling for thousands of dollars less than the hybrids.
That's great that there are alternatives to hybrids out there. but for some, a toyota Echo isn't going to work. just like if you need certain capabilities of a Chevy Suburban, a RX400, HH, or Escape Hybrid won't work either.
Now let's compare comparable vehicles and vehicle needs (so no comparisons like I mention above). If you forget about the political statements, the anticipated resale value, and the hype, then look only at the "personal financial" factor (how much more is it going to cost to the closest non-hybrid competitor that suits my needs; when will I recoup that cost), we've heard estimates ranging from 2 to 10+ years depending on actual MPG differences, # miles driven and price of gas.
So perhaps for the person who only drives to work and averages <10k mi/yr, from a financial standpoint, there are cheaper cars out there. but I'm thinking for a large number of hybrid buyers, there's still a "break even" point that fits their financial model.
But what if:
1. the price of gas goes up dramatically over the next few years
2. the hybrid hype continues
3. more people want to make a statement
4. the resale value of hybrids are stronger than their gas counterparts
if any 1 or all of these factor turn out to be true, i think people will reach their break even point faster. in fact, the first 3 will affect the the 4th reason there I suspect. So steering this post back to the discussion heading, if resale values of hybrids suddenly dropped, then the break even point would be farther away, potentially never reachable for some. But I think we would need to see gas prices drop substantially AND a lot of bad press about hybrids.
I heard that the batteries in vehicles like the Prius have a usefulness of about 4-5 years before they can no longer adequately hold enough of a charge as when new; if so, I can't imagine someone willing to pay near-MSRP for a used 4-year-old hybrid that'll need its batteries replaced--which I read somewhere will probably run a few thousand dollars, at least.
True or no?
In the great state of California (also Maine, Massachusetts, New York, and Vermont) the coverage extends out to 10 years/150,000 miles for the battery and 15 years/150,000 miles for the rest of the emission control equipment per the Prius manual.
One user on another competing forum had a 2001 Prius that had a battery die out of warranty and it was $1900 to replace it.
What all the worrying is REALLY about it this:
Irrational Fear of the Unknown.
That's all it is. And here's the proof:
Does anyone ever wonder about the "DVD premium" or the "ABS premium" or the "Side Air Bag" premium? No, because those are tried and true technology that everyone trusts to work, thus giving them the satisfaction of thinking the "value is 100% there" for it. Those items add more to the cost of a car too, just like hybridization.
But those "premiums" do not keep people from buying the car and they don't pay you back gas money savings every mile like hybridization does !!
Because EVERY SINGLE MILE you are driving a Hybrid car or SUV, you are SAVING GAS MONEY versus the comparable "gas-only" version of that car or SUV.
Every Second. Every stop light. Every (rare) trip to the gas station. Every trip to the Soccer Game. Every trip to Blockbuster. Every trip to Sam's Club. You are saving money every second. You are (usually) polluting less, unless your target car comes in an AT-PZEV model.
If you are like MOST PEOPLE, you have a CAR PAYMENT every month. Why not have that car payment be for a car that saves you gas money every second you drive it? So what if the said car payment is $450 versus $410 ? You are putting gas savings in the "virtual bank" every single mile you drive !!!
Hybrid car economics debate is similar to installing solar power for our homes. Those who look strictly at economics will not use solar because they need to see a "positive cash flow". A neutral cash flow means there are "no benefits" and a "negative cash flows" definitely is a deal breaker. They are not wrong, just have different focus and emphasis.
Same for the hybrid. Those of us who look at pure numbers will not buy one. Realitically, not many of us have the time to quantify the tangible values of pollutant reduction, reduced reliance on foreign oil and on potential gas price increase over the next 10 years.
Some of us see producing only 2 lbs of pollutants in 100K miles versus 2000 lbs in 100K miles as having tangible "cash" value. Some of us believe in "act locally, think globally" so we see tangible "cash" value in reducing our personal gas consumption whenever possible. Some of us also believe that the current struggle for oil between us (US), China and India will only worsen over the next 10 years, so we want a hedge against rising gas prices. I happen to be in this camp.
On the other hand, hybrid vehicle is currently expensive and until it comes down in price, the general public will think twice abouce putting down $5K for a car. $5K is a lot of cash when one is worrying about house payment, kids' college, retirement and all the mainstream concerns.
Early adapters like us will have to take the plunge. If there are enough of us, may be our purchase will drive down the cost making it a no brainer for my children and everyone else.
My gut feel is this hybrid technology, like auto-trans, ABS, Stability Control, is just another new technology that will eventually find its way into all cars. It is an evolution in auto technology whose time has arrived. We will likely all love at this debate 10 years down the road.
I'm coming up on middle age and I'm making every effort to be "open-minded" when it comes to issues I have traditionally been pretty stubborn about.....:D
I do hope you are right that the "first Big Wave" of Early Adopters help those further down the line. Something else to be positive minded about as a Hybrid proponent and owner.
I also see hybridization as a "option" in future cars. Toyota HAS to do that if they keep their promise of Hybridizing their entire line of cars. No way they can try and "force" a $2000 to $3000 option on people and expect to be successful like they have been.
I just hope things keep going as well as they have gone in 2005 for the Hybrid movement....:D
Why did/would you buy one? Is it because you want to reduce the amount of money you spend on filling up? Or because you want to do your part in either saving the environment and/or reducing the dependency on oil? If you were really serious about doing so for either reason, then you should really put your money where your mouth is and either take public transportation, ride a bike, or walk to/from whereever you need to go...or at least carpool. Even though hybrids spew out smaller volumes of pollutants vs. a gas-ony vehicle, they still spew them out; to add to that, they still burn gas, period...so you're still consuming oil resources. And speaking of oil--the gas engine in the hybrid still needs motor oil for engine lubrication. They don't alleviate traffic issues, since you'd essentially be replacing one vehicle with another--assuming you drive a vehicle to begin with. I mean, if you have to deal with bumper-to-bumper traffic on a daily basis...I'd bet you'd agree that a gas-only vehicle with 4+ occupants is clearly preferable to each of those 4+ folks driving solo in their hybrids instead. Too much traffic may very well lead to too much pollution, but very little pollution spewed from vehicles isn't always necessarily the result from less traffic.
I might get slammed for saying this, but I bet that there are more than a handful of hybrid owners out there who bought one primarily so that they can jump on the hybrid bandwagon...the fact that they could very well reduce their gas costs was secondary in their purchasing decision.
http://autos.yahoo.com/newcars/toyota_prius_4doorliftback_2005/16237/style_reliability.htm- l
That is what all the hoopla is about. If you buy a new car and you don't have any trouble it is reliable. If it has trouble it is not reliable. Why did JD Powers rate the 2003 Prius better overall quality than the 2004 Prius? Did Toyota get sloppy with their exuberance to build more hybrids? As far as German reliability. This is my first German car since 1967. It is reliable so far and the one trip to the dealer was an excellent experience. Much nicer than time I spent at Toyota. Lexus & Honda dealerships over the last 15 years.
On the subject. I would not buy a German, American or Japanese car at MSRP if I lived to be 100. It is money down the toilet. The odds of finding a sucker like the writer in the LA Times, is rare. It will be too late when they realize what a BIG mistake they made. To pay $18k for a 3 year old car that can be bought new for $22k is crazy. You would not do it.
Actually why compare German, when the Japanese is the hallmark of reliability.
cruis'n in 6th :shades:
MidCow
Statistics mean nothing to the guy stuck along the highway with the a dead Prius, BMW, Lexus, VW, Chevy or Porsche. Unless the Japanese got their act together since 1994 when I bought my last Toyota, they were far from reliable. My 4 Chevy trucks since 1988 have been far more reliable.
It would be even worse if you paid a premium for a car that was not dependable. You would feel trapped because you would know you are stuck with a car that was not all you had hoped for. Several of the Prius owners with problems are less thrilled with their car than before it died on them. I consider hybrid premium & problems the price you pay to ride the leading edge of technology.
That is based on reputation or experience. If you drove a Passat then an Accord or Camry you would not be impressed with the driving experience. If your biggest concern is reliability or you like to street race, then you may be on the right track. I just think the whole package presented by VW is better than Toyota. To me handling and braking are at the top of the list. Maybe if I had not started buying Toyota's 41 years ago I would have a different impression of their commitment to quality. I think they are more out to get the most money for the least amount of car they can get away with. Their profit sheet bears that out. I have spent more money repairing 3 Toyotas than all the other vehicles I have owned. Starting from the first 1964 Land Cruiser to the last 1994 PU truck. Toyota's are cheap built. I feel for those that have paid a premium for the Prius. They will more than likely lose a lot of money over the long haul. Not going to have a great TCO.
You not using Buick's old ad jingle are you :confuse: "I'd rather be driving a ..."
I agree with you statistics and unbiased reporting: J.D. Powers and CR (somewhat skewed because it is based on actual owner input; more like to complain to to accolade) are the best inputs. However there are always extremes and maybe a single 1994 Toyota PU was a statistically problematic car at the bad, unreliable extreme.
However, I find there is a great deal of good information to be garnered from the Edmund's Auto forums. Sometimes you have to sift through the "i know more than you" or "i am better than you" message drifts or the recategorization on threads, but overall there is a lot of very good actual experiencal input. By the way Falconone thanks for your input.
Cruis'n in 6th :shades: ,
MidCow
Are you sure that "Lexus dealers have an interesting scam going"? Your experience sounds like it may have been the policy of one particular dealer. It is totally probable that certain dealerships will attempt to milk the market for whatever "Additional Dealer Markup" or "Market Price Adjustment" bucks they can get. However, I would be very sceptical about the widespread nature of a situation similar to your $1,000 deposit experience.
That is definitely a dirty trick. That's the kind of thing that gives car dealers a bad name. I think I'd send a few letters to interested parties (Better Business Bureau, state bureau of consumer affairs, local newspaper, Toyota national headquarters, etc.). I'd be sure to give them $1,000 worth of pain for their scam. This posting was a good start.