Most Overpriced Vehicles

[steinravnik]

Most Overpriced Vehicles

Go shopping for a Dodge Ram, and you may find a $4,500 factory incentive awaits. On top of that, it's likely a dealer will give you an all-smiles, deep-discount price that's lower by thousands more.

Despite these inducements, Rams are languishing on lots. Nationwide dealers reported a 117-day inventory as of Nov. 1, according to Automotive News. Jonathan Banks, senior director of the Automotive Leasing Guide-affiliated ALG Consulting Group, says that excess dealer inventory is a leading indicator that it's time not just for more incentives but possibly a price cut.

Good thing, because the Dodge Ram is among the most egregiously overpriced cars in the U.S. Rounding out the top five: the Mercury Grand Marquis, Ford's F-150, the Dodge Durango and the GMC Envoy.

Behind the Numbers
In order to find the market's currently most overpriced vehicles, we first looked at market price figures supplied by Vincentric, a firm that tracks vehicle ownership costs for the auto industry. These are updated monthly to reflect marketplace inventory, demand, rebates and incentives, and represent the price that a buyer typically pays. We ruled out any vehicles where the market price was discounted less than 5% from the MSRP.

Next, we looked at J.D. Power's 2007 Automotive Performance, Execution and Layout (APEAL) survey results and ruled out vehicles with average or better satisfaction or better than two and a half stars.

We consulted Consumer Reports' Owner Satisfaction results, data from a survey that asks owners, considering a wide range of factors including price, "Would you get this car again?" Cars with better than average scores were dropped. Then we looked at one-year residual value data from ALG, which help quantify the rapid depreciation of an overpriced vehicle directly after the sale. Finally, we reordered the remaining vehicles by the amount overpriced (difference between market price and MSRP) and ranked the top 15.

On the Chopping Block
We looked at price cuts because, while alluring, they may indicate a carmaker's desire to jump-start sluggish sales, which may in turn indicate a less than accurate initial sticker price. Though a number of external forces--such as those related to the economy--can suddenly precipitate a short-term price cut, typically automakers eager to unload their vehicles will keep adjusting the transaction price through incentives in an attempt to make the vehicle more appealing.
"Short-term incentives won't have much of an effect on residuals," says David Wurster, president of Vincentric, "but a continuous pattern of using them begins to reflect a longer-term lack of appeal for a vehicle."

Some might argue this is true of the Ram 1500 pickup. The market is in the midst of a long-term change in product preference, says Wurster, toward so-called crossover SUVs that are less trucklike. The demand for pickups is currently down, so there needs to be a serious adjustment in production and pricing. There have already been some lowered MSRPs on trucks, and Toyota has brought out a lower-priced "EGrade" work-truck model of its Tundra full-size pickup.

The price adjustments are painful to corporate egos and bean counters, but ultimately better for the industry and for buyers. Banks says that between two vehicles, one priced at $25,000 and the other priced at $28,000 with a $3,000 incentive, the $25,000 vehicle is going to have a better residual value and be worth more three or five years down the line.

Continued...
http://finance.yahoo.com/family-home...bccg_eTJxO7sMF

[Kennyboy]

I probably have to say that all Jaguars and Land Rovers are overpriced. The depreciation on those cars are not worth the prestige and honor of driving a British car. In a year's time, those cars will worth only half their value.

[Uzzy]

Originally Posted by Kennyboy

I probably have to say that all Jaguars and Land Rovers are overpriced. The depreciation on those cars are not worth the prestige and honor of driving a British car. In a year's time, those cars will worth only half their value.

I completely agree. Those are the ones that come to mind when I heard the title. The formula seems too convoluded and the title then a bit too simplified.

Here's the list:

• Dodge Ram
• Mercury Grand Marquis
• Ford F-150
• Dodge Durango
• GMC Envoy

But what has me confused, is this; All but the Ram has a higher priced counter part from another division, which is essentially the same vehicle but with a few added doodads, chrome and a significantly higher sticker price (ie: Town Car, Mark LT, Aspen, 9-7x). Wouldn't those cars be truely considered the over priced ones?

[dindak]

I agree with the Envoy, Trailblazer also. These trucks have not really been updated since they hit the market and they still seem to think they are worth top dollar. I'll take an Outlook or Acadia over them any day for about the same price!

[bobojay]

Originally Posted by dindak

I agree with the Envoy, Trailblazer also. These trucks have not really been updated since they hit the market and they still seem to think they are worth top dollar. I'll take an Outlook or Acadia over them any day for about the same price!

Ditto.....

[BrickTamland]

Originally Posted by Uzzy

I completely agree. Those are the ones that come to mind when I heard the title. The formula seems too convoluded and the title then a bit too simplified.

I agree too. What this article defines as 'overpriced' are the vehicles with the largest disparities between MSRP and actual selling price. Pretty much everyone else defines overpriced differently, as a subjective valuation of a price being set excessively high. Overpriced's meaning is not concrete as they make it.

[AMERICA 123]

Behind the Numbers

In order to find the market's currently most overpriced vehicles, we first looked at market price figures supplied by Vincentric, a firm that tracks vehicle ownership costs for the auto industry. These are updated monthly to reflect marketplace inventory, demand, rebates and incentives, and represent the price that a buyer typically pays. We ruled out any vehicles where the market price was discounted less than 5% from the MSRP.

Next, we looked at J.D. Power's 2007 Automotive Performance, Execution and Layout (APEAL) survey results and ruled out vehicles with average or better satisfaction or better than two and a half stars.

We consulted Consumer Reports' Owner Satisfaction results, data from a survey that asks owners, considering a wide range of factors including price, "Would you get this car again?" Cars with better than average scores were dropped. Then we looked at one-year residual value data from ALG, which help quantify the rapid depreciation of an overpriced vehicle directly after the sale. Finally, we reordered the remaining vehicles by the amount overpriced (difference between market price and MSRP) and ranked the top 15.

Absolutely ridiculous method designed to give Toyota a pass and knock the domestics listed .

One of many key metrics missing is sales volume performance both 'stand alone' / raw historic and within segment etc .

The Dodge RAM series sales volume story is one of the most amazing and impressive sales volume stories for calender year 2007 . (To judge the overall performance you need profitability measures and a few other things as well , but on volume ...)

Ram P/U 358,295 (2007) 364,177 (2006)

For the calender year (non adjusted) thats only a loss of 1.62% in a very tough market for PUs and is the best by any PU line outside the Tundra .

This is a much more impressive volume performance than any Toyota -Lexus-Scion 'truck' product including the Tundra , turned in .

Price acceptance is always part of any sale .

Much better examples of over priced product/price resistance can be had at Toyota,(including the 2007 Tundra) Lexus , and in some sense the entire Scion brand .

The Scion BRAND failure in 2007 is the PRODUCT failure of the year .and price is part of it - the part where you bendover to find your pen to sign and pay for the Dealer installed accessories.

Think about it .

A reasonably low end priced product line with decent fuel economy numbers backed by Toyota and an average review 'base' loses almost 25% of their sales in 2007 COMPARED TO 2006 ? And really , its actually worse than that - when you realize 2006 was a down year and a disappointment as well .

Then there are the Hybrids outside of the internally and Yen exchange subsidized Prius and more weakly so the Camry Hybrid to consider as well .

Well , the list is large and long over there including but not limited to the Lexus SUV product , at least two of the Lexus carlines , and the Toyota SUV group .There is also the Avalon and some other solo artists as well .

Just go look at all the product over there that suffered double digit declines for the year and why . There is much to consider , and each one does have a different story , but also consider what they all have in common .

In Toyotas case its not just about gasoline prices , the economy , etc , or about how great or how ****ty the product really is - all of which are legitimate factors but those big losers and or big disappointments over there also have a bunch of price issues as well .

[FenwickHockey65]

Mwahaha.
The Envoy IS overpriced. Unless you have a GM Employee Discount.

[SuchANiceGirl06]

Where is the Cadillac XLR-V? That should have had the top spot IMO.

[FenwickHockey65]

Originally Posted by dindak

I agree with the Envoy, Trailblazer also. These trucks have not really been updated since they hit the market and they still seem to think they are worth top dollar. I'll take an Outlook or Acadia over them any day for about the same price!

Yeah, I agree that they are overpriced. My Envoy SLE cost around $32,000 without my father's GM Employee Discount, but I think the reason GM never really lowered the price was because the GMT-360 platform was so popular. Around here, you can't drive a block without seeing 3 or more Envoys or Trailblazers.

[AMERICA 123]

Originally Posted by SuchANiceGirl06

Where is the Cadillac XLR-V? That should have had the top spot IMO.

Hel ..no ... I MEAN oh, hello .... wait a minute....... Pardon me ma'am , but I , well , I don't think so . It would be very difficult to dislodge Lexus out of the top three positions .

1.) Lexus LS600h L
2.) Lexus SC 430
3.) Lexus GS 460/ 450h


TOYOTA RETAIL SALES
(INCLUDES FLEET & HAWAII)
39440

..........----- CURRENT MONTH- -- CALENDAR YEAR TO DATE --
.....................DSR % DSR %
......................2007 2006....CHG ...2007.... 2006.... CHG
SC 430............ 348.. 486 -28.4 ... 3,927.. 5,847. -33.1

GS 460/450h.... 325 ..299.. 8.7..... 2,067... 3,725 -44.7

[Firebird00]

The Toyota Tundra is ridiculous. Also the F350 with all the bells and whistles is nearly the price of a Corvette. NO truck is worth more than $45k unless its a Peterbuilt.

[Uzzy]

Originally Posted by Firebird00

The Toyota Tundra is ridiculous. Also the F350 with all the bells and whistles is nearly the price of a Corvette. NO truck is worth more than $45k unless its a Peterbuilt.

I know a guy that dropped almost $70K on an F350 that was loaded to the hilt. My ex-g/f's dad had a Sierra 2500 that was well over $60K. My own 2004 Silverado Z71 was nearly $42K when it was new. It's got a 4.8L, the Z71 suspension and skid plates, leather steering wheel with radio controls, automatic climate control, sliding rear window, extended cab and the usual power stuff. No leather, no OnStar. Prices here SUCK! They're getting a little better but it's still way cheaper to buy in the US than Canada.

[likearock00]

One thing not addressed is how devalued a company becomes when steady incentives are dropped on the hood. Even when you drop the price on the Ram, customers are going to go in a dealership and expecting even more discounts at the sales table. They expect a Dodge to be company that'll give their vehicles away. Putting heavy rebates on a vehicle is a horrible idea unless it is the end of the year clearance.

[bcjohnso99]

Originally Posted by steinravnik

We ruled out any vehicles where the market price was discounted less than 5% from the MSRP.

This is completely bogus!

Just because there are stupid people willing to pay a ridiculous price should not exclude it from the assessment.