By on September 22, 2009

The usual suspects (courtesy:autoloandaily.com)

Go to any auto auction. Chances are you’ll see 2001 Accords and Camrys go for higher prices than 2003 Tauruses and Grand Prixs. Is that premium justified? Well, I’ll put it to you this way.

Buy here-pay here lots are rapidly becoming the strongest segment at the auctions. A lot of you may think, “Oh, well those guys are the biggest rip-off joints in the business.” Well . . . yes and no. I do know of a few particularly nasty companies that Frankenstein cars to the poor dumb shits of the world. They also have the lawyers and lobbyists to prove it. However most BH-PH lots are more interested in selling something that lasts. To paraphrase Mr. McGuire, they want the money.

The notes will typically be anywhere from one to four years and they need to make sure the car sold will last with minimal expense during that time. They also want something that sells quick and high; and reputation sells. In spite of all the gently driven old cars, with good owners aplenty, most folks want the car that simply offered the best quality on day one. End of story. The Civics, Corollas, Camrys and Accords have been that car. In fact, there are weeks where one nationally known used car dealership will have more Accords OR Camry trade ins with over 150k than all the other European and American cars put together. Should you buy one? Well now we’re talking value . . . which really depends on the owner. Unfortunately most buyers at BH-PH lots rarely consider that side of the equation.

Get the latest TTAC e-Newsletter!

34 Comments on “Hammer Time: The Toyonda Premium...”


  • avatar
    jpcavanaugh

    I have fished the bottom of the used car market for years. In general, I have avoided the Toyonda premium. Buying new? Absolutely. Buying old used, my mantra has been to go for the durable but unloved. Old person cars. But this was when old person cars were GM C-body rear drivers and the Ford Foxes and Panthers.

    My most recent cheap car was a 96 Odyssey. Yes, I paid the premium. But this was out of default, because there is simply no american minivan that I would buy after 10 years old. Windstar? Grand Caraven? Run screaming unless you own a transmission shop. GM dustbusters? No thank you.

    After a few months with my Oddity, and with so many engine and transmission issues among even well-cared for older domestics, I am considering sucking it up and paying the premium from here on out. My Oddy is approaching 213K. It starts, runs, shifts and drives just as it ought. The a/c is colder than in my 07 Fit. At this age and mileage, I must put up with a drivers power door lock that does not work. That is it. My 93 Crown Vic (a very good domestic) with only 105K has a bad door lock, 3 bad window tracks, and a power steering gear leak. I am not ripping the Vic as being junk, after all it is 16 yrs old and has served my extended family well its whole life. However, the Honda is awfully, awfully good.

  • avatar
    Deepsouth

    The GM car is a wild card due to notorious intake failure. Fords are usually a safer bet. Higher mileage Chrysler products are a dead NO. All three suffer because they are perceived as substandard in the market when compared with the Toyota, Honda,and Nissan. Especially in the BHPH market. The BHPH buyer does not have extra money to throw at car repairs. The BHPH seller does not have extra money to throw at car repairs. That’s why the imports bring the premium. To quote you ” reputation sells.”

  • avatar
    gslippy

    My main concern in the Pennsylvania Rust Belt is… rust. The local municipalities lather on the road salt for fear of being sued by a poor driver with bald tires looking to assign blame to someone else. So finding a reasonably clean car for a decent price can be difficult.

    I do most of my own repairs, so I’m not as concerned about mechanical faults. The most recent addition to my driveway is a 2001 Elantra, 138k miles, $1850. It needed some work, which added a few hundred dollars. I wasn’t interested in getting a 94 Tercel for $5k – too old, too much money, just to save a little gas. The Toyonda premium is real, and requires some effort to get around it.

    My 98 Caravan has been pretty good (purchased at 99k miles); one big plus is that it’s relatively cheap to buy and repair, unlike the lemon Honda I got rid of.

    I also have an 05 xB, for which I paid $15k new. Some dealers have the nerve to list the same car for $13k today, which I think is crazy.

  • avatar
    jaje

    They are really worth the extra premium as you just get a better screwed together car. Yes there are some domestics and Euros that will be quite reliable but on average the Japanese Big 2 really hold their value.

  • avatar
    jaje

    They are really worth the extra premium as you just get a better screwed together car. Yes there are some domestics and Euros that will be quite reliable, and yes there are some Toyonda lemons rolling around too, but on average the Japanese Big 2 really hold their value.

  • avatar

    The truth is, the BHPH lots do most of their business wih immigrants and the immigrants are already comfortable with the Jap stuff, so it makes business sense.
    Not that I…..

  • avatar
    Bunter1

    Compare the CR reliability of 10 year old Toyondas to the Debt 3. On average they compare well with 5 year old fords and 3-4 year old GM/Cryco averages.

    Well worth the premium.

    BTW-95 Odity myself, in 7.5 years the repairs still total only into the hundreds ($4-500ish).

    I can’t afford to own a domestic (well maybe a Ford if they keep changing.)

    Bunter

  • avatar
    pauldun170

    I recently paid the Toyonda premium because I needed to replace my 13 year old Fordazda (ProbeGt) that had zero issues for the first 12 years of it’s life (fluids, belts and brake pads is all it asked for).

    I needed a station car that on occasion would have to do duty as a family car. In other words it needed room for car seats and room for the long legged 6’2 person known as the wife.
    Hello typical mid sized family sedan. I certainly wasn’t going to buy new to park it 3 miles away in a trains station parking lot everyday. No was I going to spend over 10K.

    Did I mention I only drive manual transmission vehicles?

    No choice but to go with toyonda. Gotta have my third pedal in any car I drive on a regular basis.

  • avatar
    MasterOfTheJawan

    I avoid the late 90′s hondas and toyotas. The toyotas from that period have engine sludge issues. The Hondas are so overpriced and have high mileage it’s just not worth it.

    That’s why I prefer GM products with the 3800 v6, especially those W bodies manufactured in their Ontario plant (regal, grand prix). The 3800 powered cars returned great fuel economy, performance, and quality for a fraction of the price you’d pay for an accord/camry from teh same period. This is unknown to most people because GM never ever marketed the highlights that came with having the 3800, but to owners of these vehicles they’re well known and documented. How GM could make top quality cars like the W bodies and at the same time shitboxes like the J and N bodies once again shows the top execs don’t give a fuck and are totally out of touch with the taste of the public,,, but lower down in the company there is talent and creative staff that cares about what the automotive buyer wants in a car.

  • avatar
    BDB

    With a used car the best bet is to get something that was never loved by the public so they’re cheap, but nonetheless dead reliable and good cars. I’m thinking along the lines of, say, a Buick Park Avenue/LeSabre. Boring, yes, but you get a lot of bang for you’re buck, older people usually drive them so higher mileage and less abuse, etc.

  • avatar
    Autosavant

    There is probably zero premium, if you calculate your TOTAL cost, including fuel, maintenance, repairs, AND resale value.

    If you do the math, the higher quality Accord-Camry-Civic-Corolla may well be also the cheapest option, and as a dividend you have a better driving experience and satisfaction!

    No wonder the onetime big 3 are going to hell in a handbasket, and I the taxpayer pay the bills for two of the three so far, to the tune of $100s of billions!

  • avatar
    Kevin Kluttz

    I have an interesting point: If the Hondas and Toyotas are such good, long lasting cars, why would they end up on a BHPH lot?

    Hear me out. I drive a 2001 Accord with 218000 miles on it, and the ONLY problems I’ve encountered are related to a small accident and the repair of that accident I had in the snow (suspension trauma…bad right tripot joint, and the Gomer Pyle that repaired it turned the steering wheel too far when the rack-and-pinion was being replaced and broke the clockspring, hence I have no horn or cruise, and my SRS light is on. These happened progressively two weeks after getting the car back.). My honda has been bulletproof. So, in my line of thinking, why in the world would anyone want to trade one of these at a BHPH lot?
    I feel very strongly that ANY Honda, Toyota, Nissan, or any other dependable Asian brand is on that BHPH lot because it has had a broken timing belt (Honda=interference) and all the valves have been bent, or it has been totaled and salvaged. I personally would never buy a used Honda from a used car lot. It would only be from a dealer’s lot as a lease trade-in. Anyone else ever thought like me on that? I feel it’s a valid point, and should be considered. You don’t know what that car has been through at a used car lot. Check the body seams, look for inconsistencies in the paint quality on different panels and pore over the engine compartment. You’ll find what I’m talking about.
    Some of the GMs and Fords that end up there may also be salvaged, but you may end up with a better car that has had the bugs (intake gaskets) worked out by the previous sucker who bought it new. I’ve actually had this experience with a 1989 Buick Century in 2005. Had 147000 on it when we got it (having a little financial trouble at the time), and after having been wrecked 3 times by my wife (only one was her fault, and it was driveable after all 3), Geico, the other person’s insurance company, decided to total it after the third one due to NC’s goofy insurance laws. The engine and transmission had been rebuilt, and it never gave any mechanical trouble, even after the three accidents my wife had. And it was obvious that it had been in a more serious one before we had it. Anyone else had this experience?

  • avatar
    highrpm

    I often tell folks the story of my dad’s old ’95 Odyssey. He bought it at 110k miles. Drove it for years, to about 185k miles. He changed the oil three times during that period. No plugs or air filter changes. One set of front pads and tires.

    It still ran fine when he sold it, for the same price he had paid for it years earlier!

    Whenever the oil change debate comes up with people I know, I always tell the story of this ’95 Odyssey and how it ran fine despite my dad’s 25k mile oil change intervals.

  • avatar
    fli317

    The toyonda premium is real and I don’t believe worth it at least for me. It depends how comfortable you are with cars. There is a real difference in the reputation of toyonda’s vs. other cars, foreign or domestic. I know plenty of friends and family that would never consider driving anything but a toyonda. I have asked them and for the life of them, they don’t understand why anyone would go near anything but a toyonda. It is just incomprehensible to them.

    But, I do think it is largely perceived reputation. Toyonda’s are only marginally better than many domestic models. Again, it depends on your comfort level with cars(ability to get a car repaired and/or the ability to choose the correct car in the first place). I think those that pay the premium for the Toyonda are so mortified of dealing with any type of car repair, that they pay whatever it takes to buy the vehicle with the greatest possible reputation. Even if the reputation is only responsible for a sliver of a difference in quality.

    The good news is that you can save a lot of money if you are willing to look at other models. It is also more interesting. Most toyonda’s are engineered to the extreme, such that they are mere appliances. That is good if that is what you want, but it usually does not make for very interesting cars. For example, my wife and I considered a minivan. Actually myself more than my wife. But when you realize that American minivans are questionable compared to Toyonda’s, I lost that battle with my wife. We both agreed that we did not want an Oddysey or a Sienna. We bought a Denali instead and we are real happy with it. The ability to choose definitely makes it more interesting.

  • avatar
    Kevin Kluttz

    fli317:
    That Denali makes no sense at all. You bought a GM truck over a refined Odyssey?

  • avatar
    Gardiner Westbound

    Consumers are seriously questioning Toyota and Honda price premiums. Toyota/Lexus was the quality gold standard until decontenting and value engineering resulted in a proliferation of image killing TSBs and recalls. Consumer Reports rates the Ford Fusion as more reliable than the Toyota Camry! Honda/Acura mangled its quality reputation with a several year deluge of transmission and air conditioner failures. Repair shops that 15-years ago rarely saw a broken Toyota or Honda are loaded with them. Customer care is suffering in a shortsighted effort to preserve bottom lines, and it’s not going unnoticed.

    The ideal candidate is a good car that isn’t popular with buyers. Perhaps it’s the styling, or its a bit under-powered, or it lacked manufacturer marketing support, or has been discontinued. Whatever the reason its resale value is in the dumper. Still a good car its worth is only, say, 50-percent of the price competing brands are fetching at four years. That’s the one I look for, one with a great price/value ratio! Slow depreciation keeps most Japanese makes off this list. Cars to think about include the Buick Allure, Buick Lucerne, Ford Five Hundred, Ford Fusion, Jaguar X-Type, Jeep Commander, Lincoln LS, Mitsubishi Galant, Pontiac Vibe, Saab 9-3, Saab 9-5, Saab 9-7X, Saturn Aura, Volvo S80, full size SUVs, and full size pickup trucks. Some may not have top reliability scores but the serious purchase dollars saved will buy a ton of repairs if and when required. Choosing one that has been well maintained and gains a trusted mechanic’s approval will prove economic if low cost practicality is your priority.

    Used car buyers are benefiting from plummeting domestic resale values. A clean four-year-old Detroit model with some factory powertrain warranty remaining, which covers internal engine and transmission failures, can be had for 25-percent of new cost, good value even after allowing for breakdown maintenance and the 130,000 km repair tsunami. You can buy a used domestic for a good price and bank the rest of your car budget for future repairs.

  • avatar
    eggsalad

    @ gslippy :

    The xB retains it’s value because it is good. The new “xB” is not. I just bought one to supplement my 25-year-old Volvo Diesel wagon.

    I paid $10.5k for a 22k mile example. Yes, I could have gotten “more” car for the same money. But the xB is simply a better car. I anticipate putting a relatively easy 100k on it. With plenty of room and 33-35mpg, it was the only thing to supplement the old 245.

  • avatar
    ponchoman49

    My best friend owns a used PA car lot in the rust belt of Upstate, NY. They mainly sell GM and Ford models from the 90′s up. Most anything from 2000 up with the 3800 rarely comes back with a problem and if they do it’s usually a window regulator or a purge canister solonoid that triggers the check engine light. Both are fairly easy fixes. The 3800 engines always seem to run well and last for hundreds of thousand miles and the 4T65 trannys seem to hold up pretty well with normal maintenance. The 90′s 3100 and 3400 cars are more trouble prone with intake failures a common issue and the occasional intermediate steering shaft on the full sized cars like the LeSabres and Bonneviles. The 04 and up Taurus’s also seem to hold up really well especially with the excellent 24V Duratec V6 and revised transmission. He has sold many of these cars and never heard anything back from the customers except when they want to buy something again for there son or daughter for college. Having no salt and rust damage saves a ton of grief on suspension components so being from PA is a huge plus.

  • avatar
    Halftruth

    @ Gardiner A clean four-year-old Detroit model with some factory powertrain warranty remaining

    While I agree with most of your post, good luck getting service with a domestic factory warranty.
    The blame game would be a definite and without
    paperwork showing oil changes/maintenance, good luck
    getting that tranny or intake leak fixed. I could be
    wrong here, but this has been my personal experience with Chryco and Gm dealers in the NE.

  • avatar
    Luke42

    When I purchased my Ford Ranger in 2003, I used a spreadsheet to plot the total reliability scores of used cars (from a copy of Consumer Reports) against the price of the used cars. I did this for probably 25 models that I was half-interested in, and I found some surprises.

    What I found was that Toyota and Honda were, indeed, quite reliable. The problem, however, is that everyone knows that, and it’s built into the price. I concluded (based on guesstimates and some real data) that a Toyota or a Honda which cost half as much as a new car was probably about half worn-out. After pricing some used Hondas, I decided that buying a used Honda or Toyota didn’t really save any money.

    On the other hand, it looked like used Fords were underrated. Based on a crappy 1989 Ford Tempo that I owned at the time, I assumed that the Ford Ranger with 80k miles that I was looking at would last until around 160k miles, but it cost 1/3rd as much as a new Ranger. I wanted a car that would last for about 4 years and 60k miles, and after playing with the numbers a bit, I decided that a Ford Ranger with 80k miles on it was a sweet spot for the dollars for the amount of utility left in the car. It turns out that everyone undervalued the Ranger. It has 179k miles on it today, I drove it to work this morning, I’ve owned it for 6 years, and I’m not looking to get rid of it.

    As with any used car, I’ve had to spend a significant amount of coin on maintenance, but nothing unreasonable — it seems like there is a lot of maintenance due around 100k-130k miles — timing belt, ball joints, tires, shocks, and so forth, and I’m expecting to have to do those again around 200k-260k miles if I continue to own it. This little truck so much utility per dollar that I can’t see selling it, unless some major car manufacturer starts selling a compact pickup truck with a turbodiesel engine — or if some manufacturer starts selling a hybrid with an electrical power takeoff capability. I guess I’d better start saving for those timing belts and ball-joints.

  • avatar
    carve

    My 98 Accord with 162k just had it’s first unscheduled repair last week. I had to get the starter rebuilt. $85 and an hour or two to remove and install. The cat is going out though.

    Of course, my 95 Jeep Cherokee with 190k has only need the starter, a cat and a radiator. Both damn reliable cars.

  • avatar
    George B

    I bought a new Honda Accord 10 years ago because 1 year old used ones cost almost as much. My out-of-pocket repair costs including timing belt/water pump replacement are about $1000 so far. I think that avoiding TIME spent on repairs is more of a factor with the Toyota and Honda premium than saving money. I’d buy an old very used Toyota or Honda from someone I know and trust, but otherwise I’d be worried about why the original owner sold the car. Several Honda owners I know quickly sold their very high mileage vehicles at the first sign of automatic transmission problems.

    I like unloved used Ford/Mazda products. Fairly inexpensive and fun to drive with parts available everwhere. Will keep my eyes open for a heavily depreciated 2010 Mercury Milan when it’s brand gets killed off in a few years. Basically a stretched 1st generation Mazda6 with enough room for adult passengers.

  • avatar
    NulloModo

    Kevin – a Denali is a very refined truck, I’d also take one over an odyssey anyday.

    There is a little fault in your logic regarding vehicle trade ins. Most people don’t trade because the car is worn out or breaking down, they trade because they are in the mood for something new. I see lots of people trading in vehicles still under original bumper to bumper warranty.

    The Toyonda premium is real, and best to be avoided. For a lot less than a used Camry you can buy a used Fusion or Mazda6 and have a car that is just as reliable and more fun.

  • avatar
    BMWfan

    Another reason the Toyonda vehicles command a premium is because of their better crash safety record. This is a generalization of course, and is usually model specific, but they just seem to hold up better in a real world crash. I do however notice recently that the Japanese beancounters have gotten their dirty mitts involved a little too much in the construction of their latest cars, and are starting to fall into the 2.8 trap.

  • avatar
    Accords

    My last car was a 92 Accord with 156k from a Volvo shop.. that I drove for 5yrs up to 231k when a engine sensor died… that and the rear main seal went.

    My current Accord I picked up with 106k and 3yrs later has 201k.. with little repairs. The car will go at about 230k.. only because I dont think it will last past 250k… that and I’m hunkering for a Mazda 3 hatch.

    I also hate to say..
    When Ford touts their resale on their cars as being higher than the japanese.. thats where the line is drawn.

    Ya dont TELL people ya stuff is better.. they just find out.

    An Accord or Camry is a perfectly fine vehicle for anyone who wants good transportation.

    Drop 500 every 100k for a timing belt / water pump and tensioner.. and the car will be fine.. forever.

    Id rather drop 500bux every 100k for a belt job rather than the b.s issues that GM / Chrysler have.

    Domestic stuff…
    I wouldn’t buy new with the same expectations I have for a used Accord / Camry.

  • avatar
    MadHungarian

    Interesting to hear that BHPH dealers are buying up Toyondas for their inventory. Must be somewhere else — it’s not happening here (south Georgia). Here, the typical BHPH car is a Taurus, Saturn L series, last couple of years of Olds, Windstars, Caravans, various Ford SUV’s. And second tier Asian (Kia, Hyundai, the occasional Mazda). Never sen an Accord on a BHPH lot around these parts.

  • avatar
    tubacity

    “Windstar? Grand Caraven? Run screaming unless you own a transmission shop. ”
    Be happy you chose an old Odyssey. The 2nd generation Odysseys visit transmission shops often like some Accords, Acura TL, CL, MDX of that era. Most are out of warranty now, even that extended warranty. Yet they still are higher priced used cars than Sienna or Quest which run in the boring consistent way of a car that simply keeps running. Boring meaning does not break is good.
    2nd generation Odyssey is a “transmission shop full employment van”. Not quite as bad as older Acura CL or TL but close. Consumer Reports gives them black or half black dots on their transmission repair charts. Meaning bad reliability.
    Newer ones 2005-2008 are having torque converter and shuddering problems.

  • avatar
    KixStart

    tubacity: “Windstar? Grand Caraven? Run screaming unless you own a transmission shop. ” Be happy you chose an old Odyssey. The 2nd generation Odysseys visit transmission shops often like some Accords, Acura TL, CL, MDX of that era. Most are out of warranty now, even that extended warranty.”

    But, of the three, Honda is the one who cares about their transmission and reputation. They did offer coverage well beyond the regular warranty. Chrysler? Ford? Hah!

    A colleague had a Chrysler and a Honda of the same vintage. The Chrysler transmission packed it in just outside of warranty. No help from Chrysler on the repair.

    The Honda transmission started to slip at 99,700. My friend drove it up to Honda, they looked at it and fixed it free, loaner car included.

  • avatar
    confused1096

    Kevin Kluttz :

    Many times the Honda or Toyota (or anything else for that matter) coming through the auction was traded in at a dealership and sent to auction because a bank won’t touch the mileage.

    To use your vehicle as an example: You trade it on a new or slightly used vehicle. They won’t resell something with over 200k on the clock. It goes to auction, where the mileage is chalked on the window. Newer used car lots also won’t touch it. A lower end BHPH lot picks it up, fixes any major issues, and sells it for cash outright or a one year loan.

    Believe it or not a reputable place is going to check and repair issues with a car before selling it. They are not getting thier money if the thing blows up 2 months after the sale.

    • 0 avatar
      TwoTone Loser

      This may scare you a little- My co-worker bought a 99 Honda Accord V6 from a BHPH lot with 240+k miles. The engine was solid, but the power steering was dying and the emissions control system was pretty much shot.

      He had it a whole month before leaving the keys in it so it would get Repo’d

      The price-over 7 grand.
      Yes. That’s right.

      Mind you, he is not too smart, but the premium is very real.

  • avatar
    Autosavant

    Once more, with feeling: After readign the stories of happy Accord owners in this forum (I was one of them, but did not bother to give myh example as well), you will better appreciate my earlier comment:

    There is probably zero premium, if you calculate your TOTAL cost, including fuel, maintenance, repairs, AND resale value.

    If you do the math, the higher quality Accord-Camry-Civic-Corolla may well be also the cheapest option, and as a dividend you have a better driving experience and satisfaction!

    No wonder the onetime big 3 are going to hell in a handbasket, and I the taxpayer pay the bills for two of the three so far, to the tune of $100s of billions!

  • avatar
    ZekeToronto

    George B wrote:

    I think that avoiding TIME spent on repairs is more of a factor with the Toyota and Honda premium than saving money.

    This is a huge factor for me too … and probably for anyone who’s in the role of being the go-to person for his or her family and friends’ fleet of vehicles.

    It’s the same logic that drove me to start recommending Macs to family members and friends who aren’t knowledgeable about computers (pre-XP SP2)–so I wouldn’t have to spend so much time dealing with their issues.

  • avatar
    fli317

    Kevin Kluttz:
    Absolutely, that GM truck is plenty refined. The Oddysey was underpowered and the gas mileage savings was not enough to justify that. I think the Oddysey is so refined that it was boring. The Denali is really a hot rod. Its fun. We do have to haul the family, but we really bought it to enjoy it.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States