Mad market for used fuel-sippers

Discussion in 'Gen 2 Prius Main Forum' started by qbee42, May 18, 2006.

  1. qbee42

    qbee42 My other car is a boat

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    Mad market for used fuel-sippers
    High gas prices are driving prices of pre-owned hybrids and compact cars.
    May 18, 2006; Posted: 4:50 p.m. EDT (2050 GMT)

    By Peter Valdes-Dapena, CNNMoney.com staff writer

    NEW YORK (CNNMoney.com) - In an atmosphere of high fuel prices, the market for used cars with high fuel mileage has gotten red hot.

    Gas prices can cause greater fluctuations in used-car prices than in new cars for two reasons: used-car prices are more flexible than new-car prices and used-car shoppers generally have lower incomes than new-car shoppers.

    In one extreme example, used Toyota Priuses are in such demand that they lose almost no value in the first year or two of ownership even after being driven tens of thousands of miles.

    For example, a 2005 Toyota Prius that, when new, had a sticker price of $21,515 could now sell for $25,970, even with 20,000 miles on the odometer, according to data from Kelley Blue Book. Since Toyota dealers usually charge a few thousand dollars over sticker for new Priuses, the buyer in this example probably wouldn't have made a profit, but nearly so.

    Honda Civic Hybrids are also sporting near-immovable resale values.

    The Prius is an exceptional case, though, warned Forrest Sherman, a pricing analyst with Kelley Blue Book.

    Those paying top dollar for a used Prius now may see prices drop later.

    "It will happen," said Sherman. "There are only so many people that will find (a used Prius) that attractive and will pay that much for it"

    It isn't all just Beanie Baby-style insanity, though. There are some sound fundamental reasons for the high prices being paid for hybrid cars like the Prius and Civic Hybrid in the used-car market.

    First, prices for all kinds of used vehicles are relatively high now because the supply of used cars is low. A few years ago, leasing wasn't very popular. Today, that means fewer cars being traded in at the end of lease contracts, a major source of well-maintained used cars.

    Second, prices for used compact cars, including non-hybrids, are up because of high gas prices. It isn't just that people are buying them to save fuel, but that more buyers are considering these cars and discovering how good they've actually become, said Raj Sundaram, president of Automotive Lease Guide, a company that tracks used car values for the leasing industry.

    "Resale values on mid-compact cars are jumping quite a bit," said Sundaram.

    Mid-compacts include the Honda Civic, Toyota Corolla and Ford Focus. Prices for used compact cars, a category that includes mid-compacts, have climbed about 20 percent in the past year, according to data from Edmunds.com.

    A 2005 Honda Civic EX with 20,000 miles on it is worth $55 more than its original $18,280 price, according to Kelley Blue Book.

    Extra value for Prius
    In the case of the Prius, the car is nearly impossible to find on dealer's new car lots. Customers generally have to wait months to get one. And in some ways, a used Prius offers a better value, said James Bell, publisher of IntelliChoice and a Prius owner.

    Shoppers trolling lists of used Priuses on Web sites like ebayMotors.com, for example, are looking at actual cars that are available immediately. They have choices of colors and option packages whereas, if they were shopping for a new car, they might have to take whatever is available or wait until they can get what they want.

    So, a few thousand miles on the odometer may be a small price to pay, said Bell.

    Bell has already bought a second Prius and intends to list his two-year-old one for sale at $25,000, just a few thousand less than he paid for it. He could ask for more.

    "I want a quick sale," he said.

    While these prices are a boon for sellers, they could prove to be a bust for buyers. The factors that are currently holding up prices for used hybrid cars could change quickly, said Sundaram.

    Toyota and other companies are increasing hybrid car production. That will drive down the price of new hybrids and used ones. Also, hybrid technology will likely improve in coming years, said Sundaram, making today's Prius seem like a Walkman compared to tomorrow's iPod.
     
  2. samoan_ridah

    samoan_ridah New Member

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    Nice article.
     
  3. usbseawolf2000

    usbseawolf2000 HSD PhD

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    Ok, it is now official. :D Prius pays for it's own depretiation. :lol:

    Dennis
     
  4. Catskillguy

    Catskillguy New Member

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    I suppose the writer meant to say some Toyota Dealers used to charge up to several thousand dollars over sticker. I haven't heard of charging much over sticker for a couple of years
     
  5. AnOldHouse

    AnOldHouse Member

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    <div class='quotetop'>QUOTE(Catskillguy @ May 18 2006, 08:01 PM) [snapback]257762[/snapback]</div>
    When ordering my 2005 last year at the end of April, 4 out of 9 of the dealers in central and southeastern Connecticut were charging premiums of anywhere between $2,000 to $5,000. One of the dealers said "we take open bids as the cars come in."

    Even the dealer that I used and got MSRP said that I was the last order in before they began charging premiums as well.

    I've contacted 3 dealerships thus far for ordering a 2006, including the one I bought from last year and so far none are charging premiums at this time and the wait times are about half of what they were last year at this time (6 weeks to 3 months now compared with 3 months to 8 months last year).

    <div class='quotetop'>QUOTE(usbseawolf2000 @ May 18 2006, 07:56 PM) [snapback]257759[/snapback]</div>
    The combination of having only taken delivery of my current Prius last September, that I have 17,300 miles on it now, that gas prices are up to about $3.09 and seem to be staying there this time, that I'm still in the window for the full federal tax credit of $3,150, that there is no sales tax on new hybrid car purchases in Connecticut and that I can reasonably sell my Prius for about what I paid for it, I simply could not pass up the unique opportunity to go ahead and order a new one now.
     
  6. eagle33199

    eagle33199 Platinum Member

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    so, if you can expect to break even or even come out ahead on resale of the prius after 1-2 years, then the question of it "costing" more than a traditional car is pretty much blown out the window. not only will you save money on gas costs, you don't loose any on depreciation!
     
  7. satsuke

    satsuke Junior Member

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    <div class='quotetop'>QUOTE(eagle33199 @ May 18 2006, 08:15 PM) [snapback]257788[/snapback]</div>

    I think the cnn blurb addresssed that. While for the next 12 months or so it'll be a sellers market for Prius.

    Beyond that ,. barring extention of the federal tax credits and an ongoing perceived scarcity of high MPG cars, I think we'll see Prius move into a more or less standard depreciation schedule like other cars. It'll retain value well like most Toyota cars, but with all the small car / high MPG cars coming out, eventually Prius will be out of the limelight.

    That is unless nobody makes another tech heavy car like it. Right now, with it's nav and bluetooth options / touch screen, CVS and the like .. it's more like you pilot the thing than drive it. I've seen some luxury brand cars with similiar packages ,. but not in the "standard" lineup.

    As for my Prius, I intend on driving it for at least 10 years (assuming the battries duty cycle will last that long).

    Small question ,. I've heard of people doing aftermarket updates to boost the KW storage capacity up on the battries ,. once the stock batteries wear out (and assuming the cost is excessive to replace them) are we going to see an eventual aftermarket where we are stuffing 50-100 D cell rechargeable NiMH battries into the battery compartment?

    Satsuke
     
  8. AnOldHouse

    AnOldHouse Member

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    <div class='quotetop'>QUOTE(satsuke @ May 19 2006, 12:16 PM) [snapback]258083[/snapback]</div>
    I completely agree. The combination of current factors (gas prices, the largest tax incentives, the best gas mileage in its class and virtually every other class as well, uniqueness of the Prius look, limited availability still in many areas of the US, diverted production resources to the Camry Hybrid., etc.), have all conspired into something of a "perfect storm" of keeping demand very high and supply quite limited. Most of these factors will "self-correct" or disperse over time and the market for a used Prius in a year or so will be much like that of any other used Toyota.
     
  9. p626808

    p626808 New Member

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    <div class='quotetop'>QUOTE(Catskillguy @ May 18 2006, 08:01 PM) [snapback]257762[/snapback]</div>

    They still are.. 3000 by me.. :eek:
    Not that I would pay it.. :angry:
     
  10. NuShrike

    NuShrike Active Member

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  11. WFMUNCY

    WFMUNCY New Member

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    <div class='quotetop'>QUOTE(NuShrike @ May 19 2006, 01:26 PM) [snapback]258173[/snapback]</div>
    My girlfriend got on the Web a few weeks ago, was surfing ebay, and found a 2001 Prius in Houston for $10,500 with 60K miles on it. We went up that Saturday and she drove it home....she was told by the bank she got it under blue book and averaged 53 mpg on the way home....she is totally blown away....so there are still some good deals out there to find...
     
  12. ghostofjk

    ghostofjk New Member

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    <div class='quotetop'>QUOTE(eagle33199 @ May 18 2006, 06:15 PM) [snapback]257788[/snapback]</div>
    For the next 2-3 years AT LEAST (and maybe more), this is a HUGE "wild card" in all the calculations about "cost of ownership" and "getting back the hybrid premium". David in CT is a perfect example. And it's why I, too, was able to step up from an '02 with 55K miles on it to an '06 for a net difference of only $4K. You'd have to be crazy not to do that.

    But I think David is underestimating how long this "bubble" might last when he says "a year or so". I think more depends on continued high gas prices than any other single factor. But let's not overlook that the Prius has now also earned its way into "Top 10" lists of the best cars MADE, regardless of hybrid-ness. IF a Federal tax incentive is "reinstated"/extended that applies to the Prius (instead of the current one winding down next year for Toyota's hybrids), I predict we'll see hundreds of us, if not thousands, selling our '04s-'06s in the next two years to buy '07s and '08s in almost the same market circumstances.

    As Prius supply catches up with demand, it won't happen all at once in all parts of the country, either. There aren't any '07s coming out this fall from other manufacturers to challenge the Prius. Someone may rush a plug-in hybrid to market in time for the '08 model year (maybe Toyota! :) ), and that may change the market. But, barring a crash in the crude oil market, we'll see a LOT of '05s pass into the used car market as owners "trade up" with little penalty.
     
  13. Rancid13

    Rancid13 Cool Chick with a Black Prius

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    I had to pick the husband up at Cerritos Honda 2 days ago so he could get his Accord serviced. As we were leaving, I spied a used black Prius in the front of the Cerritos Acura lot. It didn't have the side badges that the 2006's have, so I presume it was a 2004 or 2005. The price on the front window said it was $27K and some change, not sure what package # it was as we were just passing by, and I couldn't find anything about it on their website later. If memory serves me right, the MSRP for a fully-loaded 2005 was right around $27K.
     
  14. DaveinOlyWA

    DaveinOlyWA 3rd Time was Solariffic!!

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    what is this!!! no mention of the "hybrid premium???"

    hehehehehe....ohh hehehe...ya..
     
  15. Godiva

    Godiva AmeriKan Citizen

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    <div class='quotetop'>QUOTE(ghostofjk @ May 19 2006, 02:17 PM) [snapback]258193[/snapback]</div>
    I agree. I think as time passes and the Prius sets itself apart, way above the pack, the demand will remain. Those that can't afford new will want used. And as time passes and gas continues to go up (as it will) the demand for used Prii will always outstrip the quantity of used Prii available. I don't think the new 2009 release will effect it much. Those that didn't want to buy an 04-05 because the technology didn't have any track record won't want the 09 for the same reason. But they will want the 04-05-06-07-08 because they will have proven themselves. Add to that the superior reliability factor and demand for used Prii will continue to outstrip supply. That translates to high resale value.

    I'm not worried. I'm probably going to trade in my 05 when the 09s come out. Providing they are still hatchbacks and I can get a nice, dark blue with a gray interior. I may not trade it in. I may sell it myself. I'll probably get more back that way.
     
  16. micheal

    micheal I feel pretty, oh so pretty.

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    <div class='quotetop'>QUOTE(Godiva @ May 19 2006, 08:54 PM) [snapback]258332[/snapback]</div>
    Getting a blue with gray interior makes me want to trade in for an 06. If we could take more advantage of the tax credit, we would probably be much more tempted to trade-in.
     
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