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Auto dealers marking up now-popular hybrid cars
SHOLNN FREEMAN
The Associated Press
6/10/04
The Wall Street Journal

Rising gas prices are spurring consumer interest in the Toyota Motor Corp.'s fuel-saving Prius sedan, but car buyers who want one are in for a tough time.

In the latest sign that demand for the high-tech gas-and-electric car is growing, some dealers have begun tacking markups of $5,000 or more on top of the car's sticker price of $20,295 to $26,000.

With waiting lists for the vehicle now stretching six months or more, others have stopped taking deposits from interested customers. Spots on dealers' waiting lists are showing up on eBay where they are being auctioned for $500 or more.

The interest in the Prius is creating problems for Toyota. Its U.S. arm has a backlog of 22,000 orders that it cannot fill at the moment. It recently asked its Japanese headquarters for more Priuses, but is unsure how many it can get. Last fall, the U.S. allocation for the car was increased to 47,000 vehicles from 36,000. So now Toyota is yanking ads from cable television to avoid pulling into showrooms customers that it will only have to turn away.

The Prius isn't the only hybrid facing tight supplies. Honda Motor Corp., has a 10-day supply of its hybrid-powered Civic in inventory, far fewer than the 65 days' supply that car makers like to have.

The markups on the Prius are remarkable in an era of hefty rebates on conventional cars. In May, Toyota offered an average of just under $3,000 in incentives on its vehicles, according to CNW Marketing Research of Bandon, Ore.

Shopping for a Prius recently in the Dallas area, Bill J. Kelly, a 47-year-old sign-store owner, searched online and found a dealership in Plano that agreed to take a deposit. But the dealer warned Mr. Kelly by e-mail that he'd have to pay a "fair market adjustment" of $6,000 to $8,000 on top of the car's list price of about $26,000. "People are paying a premium for these vehicles," says the Plano salesman, Mazi Talebi, in a phone interview. "This is what the market is bearing for these cars."

The rising popularity of hybrids comes against a backdrop of the recent increase in gasoline prices, which now average more than $2 per gallon in the U.S. The higher prices have had an effect on vehicle sales, particularly large SUVs, which auto makers have had to prop up with bigger and bigger incentives.

Hybrids combine a gas engine with an electric motor and, in the case of the Prius for example, are capable of getting 60 miles per gallon in some situations. First introduced in 2000, the first versions of the Prius were criticized as too small and underpowered. Still, they spawned a cultlike following among some buyers. When the 2004 model arrived with increased interior room and a peppier engine, demand took off.

A Toyota spokesman says the company started to break even on hybrids two years ago and the models are profitable now, particularly as the cars sell in greater volumes. Toyota eventually plans to build hybrids of most of its products.

Full Article Here

 

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Discussion Starter · #2 ·
Toyota says the Prius is profitable for them.

No matter what they say, you know GM execs would love to have a profitable car that dealers could mark up, instead of offering huge discounts.
 

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Originally posted by ponchoman49@Jun 10 2004, 03:01 PM
Typical greedy dealers. There should be a law or cap that prevents dealers from marking up these already pricey vehicles.
it's up to consumers to speak with their money. dealers can ask what they want... and if they get it, they were justified in asking higher than MSRP. i thought it'd take rebates and incentives and tax breaks to get people into these already pricey vehicles... guess i was wrong! these are more like UNcentives if you ask me!
 

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Typical greedy dealers. There should be a law or cap that prevents dealers from marking up these already pricey vehicles.
I have to take the time to respond to this, even though I tend to respond to it repeatedly.

MSRP is the -suggested- retail price. Customers looking for deals can have first pick from the abundant Suburbans and Excursions that are out there, and they won't even pay close to MSRP for them.

Dealers want customers to be buying their cars from -them-, not scalpers. When demand, and thus market value, vastly outstrip supply, there will be plenty of private individuals out there to make that quick buck. I think the best example was with the Mazda Miata, which was frequently sold by scalpers at upwards of seven to ten grand over sticker.

If there is a law against markups, then the law should also include markdowns, and there are few who would oppose a true no-****er sticker.

Ghrankenstein
 

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Wow, so with a $6,000 markup it will now take, what, 47 years before these buyers recover the cost of buying a hybrid. Well, at least they're saving the environment.
 

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The big joke on these people paying thousands of $$$ over sticker is that they will never recoupe that money from fuel savings. It's already been chronicled on this site that the cars don't get anything close to their EPA mileage ratings, and paying a mark-up will only add to these people's disappointment once they realize the cars DON'T get 60 MPG.
 

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EXACTLY.

Some people are too stupid or nieve to see past the advertising.
 

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It's not just to save fuel but to make them feel good that they are making a difference, and it is thier money

As for here in Ontario there is a law that govererns MSRP and that dealers cannot exceed that price (without adding value added options)
but this is not across Canada as of yet and a province only 50 miles from here can raise the MSRP to what ever, and you should see some customers and how they can fall for this pratice i.e. "you would only pay $10000 for my trade and they give me $12000" not relizing they have paid $2000 more difference.

I believe that MSRP with out any discounts is plenty of profit for any dealer on hard to get products (except maybe on an Aveo or bargain basement products like that) but they have to realize this maynot be the only car they purchase from them and it's a start of a relationship
 

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I have to agree with Doh. Although a cost benefit analysis would give a thumbs down to purchasing a marked-up hybrid, it isn't just about saving money.

Unless you need more power for towing, etc., why would you buy a V8 over a V6?

Why does anyone buy a Vette of GTO?

Because it makes them feel good.

For a number of reasons, I won't be buying a hybrid, but I understand that it is more than saving money that motivates people to buy them.

Now this last bit is off-topic, but I'll ask anyway: Does anyone know if a Saab counts as a GM car for the purposes of the GM owner loyalty rebate program?
 

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The Prius will save gas, but at quite a premium. I ran the following calculations NOT including the $5000 markup on the Prius.

I'm sorry, but as much as I'd like to say I preserved 1,481.5 Gallons of the Earth's precious fossil fuels, I'm NOT going to pay $4.45 a gallon for them.

-Enjoy the stats :lol:

 

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Originally posted by saabman@Jun 10 2004, 05:38 PM
I have to agree with Doh. Although a cost benefit analysis would give a thumbs down to purchasing a marked-up hybrid, it isn't just about saving money.

Unless you need more power for towing, etc., why would you buy a V8 over a V6?

Why does anyone buy a Vette of GTO?

Because it makes them feel good.

For a number of reasons, I won't be buying a hybrid, but I understand that it is more than saving money that motivates people to buy them.

Now this last bit is off-topic, but I'll ask anyway: Does anyone know if a Saab counts as a GM car for the purposes of the GM owner loyalty rebate program?
Saab does qualify for GM Owner Loyalty program.
 

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Sorry, I had a bad link...

With the $5000 Dealer markup, (at $2.50/gallon) the numbers work out to:
Prius Owner Premium = $11,596.30
Price Per Gallon Preserved = $7.83
Prius Owner Gas Tax per Gallon = $0.116

With the $5000 Dealer markup, and at $2.00/gallon the numbers work out to:
Prius Owner Premium = $12,337.04
Price Per Gallon Preserved = $8.83
Prius Owner Gas Tax per Gallon = $0.123

Here's the original Stats:

 

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There are a million ways to show how these hybrids are NOT the bargain people like to think. Here's another:

15,000 miles per year/ $2.00 a gallon for gas:

2005 Corolla ($16,000) 35 combined MPG = $857 in gas per year
2004 Prius ($22,000) 45 "real" MPG = $667 in gas per year

So you save a whopping $190 a year with the Prius! It'll only take 30 years to make up the $6,000 difference in price. Of course, that's not including the $5,000 "dealer market adjustment". :rolleyes:
 
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Hmm, capitalism.

Who'da thunk?

<_<
 

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For some reason I kinda doubt that.
 

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Discussion Starter · #20 ·
The old Metros got that kind of fuel economy.

Unfortunately, most cars have become heavier and larger, including the Corroda.

We all need 15 airbags and 7 headrests now.
 
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