REPORT: Some consumers see price gouging on 2010 Prius
Posted Aug 26th 2009 7:02PM by Jeremy Korzeniewski
2010 Toyota Prius - Click above for high-res image gallery
Dealerships looking to capitalize on a hot-selling model's popularity is nothing new. Perhaps that's especially true when the overall market is solidly in the doldrums, as is the case right now. That said, it's not terribly surprising to hear reports that a number of Toyota dealerships are adding so-called Market Value Adjustments of up to $5,000 (possibly more) on some Prius models, especially those equipped with the hard-to-find solar sunroof option.
There may be evidence to support the notion that the recently-concluded Cash for Clunkers program added notable demand to the already popular 2010 Prius, and that $4,500 rebate may make it easier for dealers to hide an extra surcharge to the car's asking price. Still, it seems that a bit of smart shopping and a few hours on the phone ought to be all it takes to find a dealership within driving distance that's willing to honor Toyota's MSRP.
[Source: Prius Chat, Daily Tech]
Reader Comments (Page 1 of 1)
nrb 7:11PM (8/26/2009)
Taking advantage of the situation to charge full MSRP is one thing, but to jack it up beyond that is, well, not someone I would want to do business with.
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doug 10:22PM (8/26/2009)
And yet as a customer you have no problem strolling into a showroom to declare "I know sales suck so I expect a great deal." Works in reverse too. No one is being forced to buy at the inflated prices. Do you expect a discount on a rare car? Charging the MSRP is "taking advantage?"
nrb 11:36PM (8/26/2009)
Doug, you make some interesting assumptions about me.
"And yet as a customer you have no problem strolling into a showroom to declare "I know sales suck so I expect a great deal.""
I do have issues with people that try an screw a dealer, just because sales suck. Far too many people want dealers to take a loss on a car and that's not right either. I've voiced that opinion before.
"Do you expect a discount on a rare car?"
These cars aren't rare. They have an MSRP. If they're underpriced for the market, let Toyota jack up the MSRP.
"Charging the MSRP is "taking advantage?""
I never said that. If you read the article, they're charging OVER msrp. That's what I have a problem with.
If fact if you want to make attacks on me, you really should read my history. I've said that I expect dealers to bring the price up a little during C4C. I don't have a problem with that, as long as it doesn't exceed MSRP. Dealers that get greedy are dealers that piss off customers. Not a good, long term, business practice.
Nozferat 1:38AM (8/27/2009)
DOUG:
Yes charging MSRP is taking advantage. That's a SUGGESTED price...not a price the car is worth or the actual price the dealership buys it for.
Please don't have a bleeding heart for dealerships...they have handouts, holdbacks, commissions and incentives you as a customer can only dream of. So when some douche in a Toyota dealership tells me a the Prius is a "rare" car and they have none, I laugh my ass off...this is a mass produced car...not a rare Ferrari.
Bip-D-Bo 8:55AM (8/27/2009)
It's not price gouging. It's free market. If people want a Prius so bad that they are willing to be ripped off, then so be it. Price gouging only happens in cases where someone sells things that are absolute neccessities for unreasonably high amounts of money during a time of emergency like during a hurricane. Even in this case, business should be expected to raise prices to some degree for the service of anticipating an emergency and remaining open during the emergency.
wincros 7:38PM (8/26/2009)
That makes them as American as apple pie and the reason we hate to buy automobiles. It is one of those peak unsatisfying experiences like going to Las Vegas and losing or being lured into a circus side show. It is the sort of behavior that makes internet auto purchase look more and more attractive to people. Look at CarMax making a fortune cleaning the sleaze out of the experience of buying a used car.
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Unknown 9:59PM (8/26/2009)
I don't think dealerships were too happy with the CARS program. Since they won't be receiving that rebate money for another few months, they're on the hook for the $4k x 690,000. When I went to browse, I was told by most salesmen to come back after the program was over so they could offer discounts on their cars again.
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nrb 11:40PM (8/26/2009)
Most dealers I know were mixed about C4C. They like the bump in sales, but worry about future sales. They're certainly frustrated about when/if they'll get their money. Some stopped doing C4C deals well before the deadline. They simply couldn't absorb the risk.
wincros 10:26AM (8/27/2009)
Well, we all know that dealers are basically Republicans who are torn between wanting the money and hating to see a Democratic program succeed. So they complain about the speed of their payment as if they have never received a tax refund. If the government placed a treasury agent at every dealer to write a check at the close of the transaction they would complain about government waste and not being careful enough with their tax money.
Throwback 1:15PM (8/27/2009)
wincros, "we all know that dealers are basically Republicans" Really? have you done a survey of all the dealers in the USA? Or are you assuming only Republicans operate small business?
mk3 9:57PM (8/26/2009)
I agree with the above #1 and #2 comments. It's why I'd love for the manufacturer's to get rid of dealers and sell to me direct via a store or internet.
However, if they are being upfront about the adjustment, it is very american to charge market value for a product even if it means above an arbitrary MSRP. of course we know salespeople at dealerships are very upfront - NOT.
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Knuckles 8:57AM (8/27/2009)
A car (or anything for that matter) is worth what the market will bear, regardless of MSRP, Blue Book et al. After a more than a decade of rebates and incentives the dealers knew what was going to happen. As usual the government just made it worse. The ploy pulled sales in from the future but, unlike the car company incentives, the dealers are still waiting for their money. So now they know that, if they survive long enough to get their money from Uncle Sugar, there will be a hole in the market early next year.
But wait, next year many of the cars that people bought with CARS program money will be back on the market as repos when they can't make the payments. And we are supposed to trust these wizards to handle health care!
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Will Collins 9:43AM (8/27/2009)
I had this kind of experience with a Toyota dealership. And you know what I did? I popped my clunker into 4WD and drove over the divider between the Toyota dealer and the Honda dealer. The Honda dealer liked my style and gave me an additional $3000 off the sticker of a Insight EX. I almost made the mistake of buying a Prius just because the popular media sites say it is better than the Insight. I am so glad I ignored their advice. I put $2000 down in addition to my clunker trade-in and drove away only owing $13000.
Thanks Toyota. Your greedy dealers saved me from paying a high car payment.
Hell has no fury like the scorn of a clunker shopper.
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wincros 10:17AM (8/27/2009)
I like your style too.
macmanic 10:40AM (8/27/2009)
When I first started trying to buy a Prius Aug 1 (beginning of the C4C) I came across a couple of Toyota dealers trying to milk the situation. One stated the MSRP on the phone as the asking price and then when I came in to buy the car they raised the price $2k. Another tried to sell me "undercoating" for $1000. Needless to say these 2 dealers are now forever off my list when it's time to buy again. I finally found a fair deal with a $400 discount off the sticker price from the Toyota dealer on top of the $4500 C4C for my old POS chrysler. I take delivery of my 2010 Prius tomorrow.
Dealers that practice gouging may make short term profit but they destroy their long time karma with the public. Is that smart business? Not in my book...
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