backtop


Print 137 comment(s) - last by nugundam93.. on Aug 31 at 10:21 PM

Some customers were just breaking even with cash-for-clunkers or even worse

While many of the domestic automakers offered steep price cuts on top of "Cash for Clunkers", many buyers chose to purchase vehicles from foreign manufacturers instead.  Leading the pack was Toyota, whose Corolla was the leading vehicle purchased under the program by the first week of August.  Even recently retired Sen. Bill Frist (R-Tenn.) traded in his 1991 Chevrolet Suburban for a brand-new Toyota Prius, joking, "You don't see a lot of Republicans driving a Prius." 

Now it appears that a handful of Toyota dealers raised their prices to offset the government rebate and cash in on the high demand for its vehicles.

DailyTech has an exclusive inside look at some Toyota dealers' so-called "market value adjustments" (MVAs) on popular vehicles such as the 2010 third-generation Prius hybrid.  With the typical sticker price of the Prius coming it at around $26,000, many dealers across the country have been charging $3,000 to $10,000 markups, more than offsetting the "Cash for Clunkers" rebate of $3,000 to $4,500 in some cases.

On the forum PriusChat, one customer reports, "We live in Lake Placid Fl. and could not deal with the dealer here. One charge they wanted was a market adjustment for this area of $3999.99 also dealer fees of $695.00."

A number of others on the same site share similar stories of their own.  States one buyer, "A certain dealer in NJ that I am not at liberty to mention charges 6500 over sticker and calls it fair market value adjustment. luckily I found another one close by with better morals. They are charging sticker price and not a penny more."

Speaking with a trusted source who had recently been shopping for a Prius, DailyTech was able to confirm one such dealer that was spiking prices.  Located in the heart of the U.S. auto industry, Suburban Toyota of Troy, Michigan was charging more than a $2,000 markup on a Prius it had in store. 

States our source, "Suburban Toyota in Troy was one of the ones that wanted a $2,000 additional fee over the MSRP, to the best of my recollection. The other places weren't named, but only referred to by a salesman who was offended by the other dealerships charging what he said was price gouging. I thought it was like ticket scalping. They know they have a hot item and could probably sell all they have, even for $5,000 additional MSRP. The Prius is a great car but they didn't produce enough, especially ones with the amazing solar roof that keeps your car cool when it's parked in the summer."

Hoping to gain further insight into this, DailyTech posed as an eager buyer and called Suburban Toyota.  The following is our conversation:

DailyTech:  "I've been calling all over trying to find a new 2010 Prius and no dealerships have any in stock.  Do you have any?"
Sales Agent:  "We do... it's been sold to Ford but the sale isn't finalized yet."
DailyTech: "But I heard from another dealer that I might have to pay more than the MSRP on it -- something about MVA or something like that -- is that true?"
Sales Agent:  "Yes"
DailyTech "How much more?"
Sales Agent:  "About $4,000 to $5,000."

The sales agent went on to elaborate that we might be able to buy it if we moved fast.  The agent explained, "When one comes in, typically it's sold before it even gets the chance to hit the lot."

DailyTech then proceeded to contact six other Toyota dealerships in lower Michigan.  None of the other dealers had stock in, but when related a slightly altered version of the story of the MSRP markup by Suburban, they all said that they sold their vehicles at MSRP.  A couple expressed shock or surprise at the development, but at least one commented, "I know who you're talking about."

It appears that most dealers are clean, but based on the feedback DailyTech has picked up on in various Prius forums, there are dealerships in at least several states that are similarly price gouging on the 2010 Prius via MVA's. 

Toyota was contacted by DailyTech and we are awaiting their comment.

Markups such as these are really nothing new, but are typically limited to low-production vehicles or vehicles that have been recently introduced.  The Prius itself has also been the victim of occasional price gouging since its introduction in the U.S.  While it's unknown exactly how many people were willing to pay the MVA's on the Prius, the fact that the elevated MSRP erased or even surpassed the Cash for Clunkers rebate was likely a hard pill to swallow for many buyers.

Update 1: One of the dealerships DailyTech contacted earlier this morning received a vehicle this afternoon and offered it to our "buyer" at MSRP.  This essentially invalidates the argument that no vehicles are available on the local market.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: Boggles my mind.
By mmntech on 8/25/2009 1:56:10 PM , Rating: 5
Agreed. Anybody who pays over sticker is an idiot. Especially for a Prius which is already overpriced as is compared to other cars in its size class, even from the same manufacturer.


RE: Boggles my mind.
By Mitch101 on 8/25/2009 2:55:49 PM , Rating: 2
What's the price. The sticker says $26K but I would like to pay $30K.

Their Car Salesman. Not exactly known to be high on the trustworthy/humanitarian scale so this is a no brainier that they would mark things up to people dumb enough to pay for it.


RE: Boggles my mind.
By AlexWade on 8/25/2009 4:09:35 PM , Rating: 5
5 years ago this December, I had my eyes on a beautiful white 350Z roadster. I was in love with that car. Fully loaded, 6 speed manual, rear-wheel drive. I know I could get a more powerful sportscar for less, but I loved the look of the car. Plus, Nissan had a special 1.9% interest rate for this car. The dealer had the 2004 model on his lot. I said I would take it at invoice. After 2 hours, the lowest he would go is $3000 above invoice. So I walked out.

A few days later, they called me back. I had my 350Z at invoice and at 1.9% APR.

What people don't realize is that the most powerful negotiating tactic you have are your feet. Just leave. Wait them out. Desperate buyers are more likely to pay a bad price. The greatest trick car dealers play with you is to get you to think you have little power. The fancy gimmicks are there just to distract you. You have all the power.

You can also go to www.beatthecarsalesman.com. A site so effective, that car dealers threaten him. (http://www.beatthecarsalesman.com/speakout.html)


RE: Boggles my mind.
By nugundam93 on 8/31/2009 10:21:30 PM , Rating: 2
...if only a lot of car buyers were like you alex. very good move there.


RE: Boggles my mind.
By andrinoaa on 8/25/09, Rating: 0
RE: Boggles my mind.
By hybridr6 on 8/25/2009 6:25:34 PM , Rating: 5
"Anybody who pays the sticker price is an idiot."

Fixed. :)

Do people really pay MSRP for vehicles? I've only purchased one new vehicle, but I payed well below MSRP for it. Over 2k less in fact.


RE: Boggles my mind.
By deeznuts on 8/26/2009 2:58:30 PM , Rating: 2
My mother is from Vietnam where you bargain for everything, even buying groceries.

I will never ever buy a car without taking her. They tried to charge her for floormats, and other things on an Accord once, she said take them out. Then, they tried to charge her for pinstripes on the car, and, with a straight face, "Take them off."

I've had her with me every car I've bought, since I was 16 about 6 cars ago lol. I just can't bargain.


RE: Boggles my mind.
By knutjb on 8/25/2009 11:32:12 PM , Rating: 2
Supply, demand, and suckers.

Go right ahead and throw money at a car that isn't all that comfortable to ride in. They're buying it to prove they care more than you do, even if they get ripped off doing so.


RE: Boggles my mind.
By seamonkey79 on 8/26/2009 8:26:15 PM , Rating: 2
Plus, to my observance, buying a Prius means you get to drive like a jerkface at 15-20% higher speeds than other people.


"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki