By on May 27, 2011

TTAC Commentator gman37 writes:

Steve and Sajeev: I was hoping to pick your brain for a second regarding the used Prius market right now.  Help a Hammer Time follower out! I own a 2010 base Prius (Model II), and I have been seeing listings at local dealerships for base model Prius’s (????) selling for 3-4K above new MSRP prices.  For instance there is one with 15K on the clock selling for 27K, when new the MSRP was around 24K.

Is this actually occurring right now or are these people out of their minds?  My wife and I were debating on selling it and buying a cheaper car with a smaller payment if we could actually make a decent profit on it.  On the other hand, 50 MPG in the era of $5 a gallon gas is pretty great.  Its a gas!  Thanks for your time.
And Sajeev, I always wanted a Mercury Marauder!
Sajeev answers:
So get a Marauder! Life’s too short to compromise, even if said Panther wished Ford took that very same advice. And your wife is totally cool with it, I already asked.
Of course the Marauder isn’t exactly cheap in terms of fuel economy, and clean examples might actually be at the bottom of their depreciation curve,  like the (LT-1 powered) Impala SS it was supposed to surpass. If said Panther Love puts your marriage on the rocks, buy any (reasonably dapper) used compact sedan (Civic, Corolla, Sentra, Focus, etc) and enjoy a better driving experience than your Prius with minimal impact to your monthly fuel bill. Remember, motoring fun is important!
Steve Answers:
Sajeev, I don’t think he wants a Panther. But who knows? Keep it. What the hell are you going to replace it with?
The $27k price is for the unfortunate soul who ruined his credit and can’t be financed through Toyota Financial Services. The dealership will have a partnership with a secondary finance company that is willing to take the risk. What that buyer will be looking for is not the price… but the monthly payment. The dealer makes thousands. The finance company hopefully has a customer that makes the note, and the buyer probably ends up screwing themselves twice.

Once by buying the overpriced car with hysterically bad finance terms. Then they probably end up selling it after the ‘big’ 60k service because they’re bored, bad at math (surprise?), and/or totally ignorant about the future maintenance costs. Usually a combination of all three.

Keep the car. The next time you should go to the dealer (if ever) is when electric cars are the norm and the Prius is no longer an economical proposition. This should be some time between 2025 and Armageddon. By the way, the Toyota dealer couldn’t give a flip about you once you walked out their door with one less check in your pocket. Sorry but it’s the truth.
Need help with a car buying conundrum? Email your particulars to sajeev@thetruthaboutcars.com , and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder.
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32 Comments on “New or Used: A Prius Seller’s Market?...”


  • avatar

    I sold my RAV4 after the `big’ 75K maintenance for $10k because I was bored. No regrets, and I’m sure some poor guy got a dependable and reliable family vehicle. Everyone’s happy, even the dealer. So if gman wants to get rid of his Prius, why the heck not. I just don’t think it’s so easy to get a good price on it though, even in the panic-stricken market. And it’s just painful for me to bargain with some sods who cannot divide the margin by the time period. If I had a friend like Mr. Steve Lang, then maybe it could be a profitable transation. I mean, if Gman had…

    • 0 avatar
      Luke42

      I sold my RAV4 after the `big’ 75K maintenance for $10k because I was bored. No regrets, and I’m sure some poor guy got a dependable and reliable family vehicle. Everyone’s happy, even the dealer.

      I ended up with my Ranger after a transaction like this. I’ve spent as much on maintenance as I did on the truck over the last 100k miles, but I’ve still spent half as much on my Ranger as the first guy did. People like me are thankful people like you exist. :-)

      Also, that 2.5L engine that Ford put in to those things in 1998 are nearly indestructible — and gawd knows, I’ve put that engine through a lot. I just had the 2nd timing belt and a set plugs/wires put on the thing and it’s running as well as the day I bought it. I can’t say as much for the engine accessories, but those are cheap and easy to replace on a RWD vehicle that has lots of room in the engine compartment. Ball joints and other suspension components wear out and have to be replaced periodically, too.

      Too bad the thing doesn’t meet my needs anymore. I need something with 4 doors and a back seat these days for daddy-duty. It’s a bloody useful little vehicle, and the next person who owns it will get years and years of sturdy and reasonably dependable service out of the thing. Now I’m bored with it after it’s big 183k-mile service. :-)

  • avatar
    ajla

    Hey Sajeev, gman37 didn’t say what kind of Marauder he wanted.

    I think one of these would be the perfect Prius followup. You should have enough money left over to buy an Insight too.

    • 0 avatar

      Good point. This whole Panther Love thing has gotten so out of hand that I naturally assume the notes in my inbox always reference it. Breaks my heart as a Fox body man, actually.

      • 0 avatar

        yeah, what is the deal with the Panther love???! In that class, I vastly prefer the old bubble Caprices. If I could get one of those with a stick, it would be tempting. But while I’m not quite Steve Lang, I don’t give in easily to temptation. Otherwise I’d have bought a Boxster a long time ago. And probably an old Peugeot 404.

      • 0 avatar
        ajla

        Asking prices for the Panther Marauder are around 80% higher than for a comparable Grand Marquis LS.

        How much would it cost to do a reflash, headers/dual exhaust, sway bars, better tires, and 3.73 gears on a Marquis?

      • 0 avatar
        Educator(of teachers)Dan

        @David, they’re a good starting point to turn the car into whatever you want it to be. The basic parts are durable and when something does go wrong it’s usually cheap enough and easy enough to wrench on that someone with a little mechanical aptitude can fix it.

        I could buy a Grand Ma and turn it into a cop car clone or make it ride so plushly that the “Early Bird Special” crowd would fight me for it. They’re the last Detroit style BOF sedans. Some of us have a soft nostalgic spot for real American cars. That’s why I’m seriously considering hunting for a nice Cartier Lincoln Town Car for my next vehicle.

      • 0 avatar

        Holzman: the Bubbles are ancient history, they killed the Panther this year. The dearth of bubbles worthy of daily driving is real, hence the need for Panther Love.

        ajla: maybe $1500-2000 for all that stuff (except headers, that’s not a big help) unless you know people or hunt craigslist/junkyards regularly.

    • 0 avatar
      mcs

      Here’s the solution, a Panther Hybrid Conversion:
      http://www.xlhybrids.com/products/conversion

    • 0 avatar
      Scoutdude

      I’m not sure where you came up with the Marauder prices are 80% more than GM LS prices. Depending on mileage stock or stockish Marauders run for $7k to $14K though very few change hands for that $14K number anymore and those are usually examples with only 20-30K on the clock. At the $7K price I paid for mine it was pretty much in the range of the asking prices for the GMs in my area at the time. Yes it did need a couple of things when I bought it, new tires all around, the rotors were warped and it was 5K overdue for it’s 100K service. So by the time I did those things (If I didn’t already have a set of tires) I might have had an extra 1K-2K into it vs a GM with similar miles and interior exterior condition.

      Yes with a set of long tubes, a less restrictive intake and 4.10 gears you will probably end up with a car that is just as quick as a stock Marauder but all that money thrown at a GM won’t increase it’s value in fact it will decrease it’s value while doing that same work to a Marauder will increase it’s value or at least not decrease it and it will return even more bang for the buck performance wise.

  • avatar

    Flip it and get into something compact and non-hybrid. Civic, Elantra, Focus and Corolla all fit the bill. If you haggle the dealer a bit you should be able to come out ahead financially given the current freakishly high used car values.

  • avatar
    drylbrg

    I just sold my 2005 Mustang GT to a Ford dealer for more than I was expecting to get from a private party sale. Things are getting weird out there.

  • avatar
    KixStart

    When gas hits $4/gallon, things get a bit weird. Some years ago when fuel prices were up, used Priuses were fetching new Prius prices.

    Whether or not you can make this work for you… hard to say. You can put the Prius on the market and see what you get for takers. But what the dealer lists cars for and what he ends up getting are two different things.

    But then you must buy something else, so you must be sure you can get a car you like (and I’d still recommend something thrifty on fuel) at a price that makes the deal sensible. If you pay sales tax, that narrows your margins for making this exchange worthwhile.

    Steve Lang,

    I can’t imagine the dealer would publish a high price that involved the finance and all… I would think he would want to rope ‘em in with a low price and then sock ‘em with the fees and whatnot later.

    • 0 avatar
      Steven Lang

      They never do. Finance deals are driven by the APR when it comes to print advertising. Finance numbers have pretty much given way to lease numbers for publications.

      I’m looking towards that day when dealers advertise a ‘weekly’ payment. $45.99 a week instead of $199 a month would look awfully good to a lot of the subprime consumers out there.

      • 0 avatar
        MoppyMop

        Just advertising it, or actually collecting the payments weekly? Some of the dealers in my neck of the woods have actually started advertising “daily” payments.

  • avatar
    Tree Trunk

    The sucker price a dealer might try to lure some poor soul into paying is not what they will pay you in a trade in.

    The Prius is a nice car and will serve you well for a long time, giving you some protection against further gas price hikes.

    However if you can’t handle the payments 5K 30mpg beater might be the way to go, just stay away from the Panther cool aid!

  • avatar
    SunnyvaleCA

    An old used Prius with the car-pool bonus could be worth much more than a new one without.

  • avatar

    Steve,

    I don’t have a Prius, I do have a Mazda3 that I really want to trade in for a new car, I read all over the news that used car, specially small, are up in value, I went yesterday to a Ford dealer to test drive the new Focus, as I was waiting, I looked at one of the sales people appraising a trade in, he was looking at a site called “Galves” , he said that this is their guide for trade in value.
    So, If I look at Galves, can I assume this is what I should expect to get for my car from a dealer?

    • 0 avatar

      This may sound funny to other commentors, but I found that KBB tracks pretty well. On the other hand, my cars always delivered very close their EPA mileage.

    • 0 avatar

      So how was new Focus? I currently drive 2003 Focus with 2.3L. It is pretty fast and fun to drive, but cheaply made and uncomfortable. And seat is too high for sporty driving, some times I feel it may roll over. BTW there will be electric Focus too. No need to wait Armageddon or 2025 either.

  • avatar
    monomille

    Interestingly, there isn’t a big” maintenance at 60K or 75K. Closest thing to it is spark plug and PCV valve replacement between 100 and 120K which are user doable and antifreeze replacement at the same time. I have a 2005 with 110K on it and that is all I’ve needed to do to it to meet the maintenance sked. BTW, the brake pads/shoes are still doing fine. Maintenance requirements are minimal aside from oil, filters, tires.

    • 0 avatar
      LectroByte

      The Prius is one of the lowest maintenance cars around. No timing belt or serpentine belt. I figure since the engine is only running 60% of the time, more or less, things like radiator hoses are seeing a lot less heat and so on. I have about 75k on mine, and other than oil changes, air filters, a set of tires, that’s been about it.

  • avatar
    parbuster

    sell the prius to a shmuck for that kind of money. then buy a new chevrolet cruze. you will have 10 grand in your pocket and a much nicer car to drive.

  • avatar
    gman37

    Thanks for all of your responses. I think the only car that would fit my needs other than the Prius is a TDI Jetta Sportwagen. Near 40 MPG combined, “historically” long engine life, and plenty of cargo room. I had a deposit on one in 2008 but ended up with a MKV GTI with 0% financing. But, with the HPFP issues and its price tag, it isn’t in the running.

    I did consider getting a Fit and saving some coin, but I have averaged 50 MPG in the Prius over 28K, and I drive a ton for work and take plenty of road trips. For the amount I drive, I am hard pressed to find a car that fits my needs better. Plus I hear the Fit is quite noisy at cruising speeds lacking a 6th gear.

    If I could find a nice 4 cylinder wagon for 16-18K, that would do the trick……….but I don’t live in Europe, so that isn’t happening.

    Either way, we are going to stick with the Prius. As much as I hate paying a car off, it is sure nice driving 500 miles on 9 gallons of gas.

    Marauder! Sajeev you will smile when you know that my neighbor drives a Gen II Town Car with the 4.6 (maybe a 91?) All original and still rumbling!

  • avatar
    saponetta

    Steve,

    I thought you were the TTAC auto dealer expert. Your comments on the readers questions are basically incorrect. Quick dealer track bookout on that prius gives 22225. Tell me a lender that will advance over 120% to a person with poor credit. You couldn’t even get that bought rolling sale stax with the check going back to the dealer. Typical secondary terms on this deal would probably require 9k down for this deal. As the bank will probably only lend 18 or so on this to a secondary customer. This is all assuming of course that the customer makes enough money to get an almost $500 payment call.

    • 0 avatar
      Steven Lang

      Gman was the one who mentioned the $27k sticker. But my financial points are still valid.

      Just because a vehicle may be priced beyond clean book does NOT mean that the vehicle can’t be financed for that price and sold to a finance company. Any finance deal primarily takes into consideration the financial capabilities of the seller. If that customer has strong enough credentials the deal can go through.

      You have to take into account a few other variables. Late models like the Prius can be financed for as long a six to seven years these days. The ‘book’ depends on which book you use to value the vehicle. NADA for example prices that vehicle $3000+ higher than your own at $25,500. Add in a 120% L/V ratio and you still get over 30k without even taking other financial inducements into consideration.

      Interest rates and finance charges (and bogus fees) can easily jack these types of deals into the financial stratosphere. This gives more space to the finance company and dealership. Finance companies also provide incentives on the back end of these loans, and in a few cases the dealership may even have the same owners as the finance company.

      Finally, you also have some companies on the prime side of the business that will simply finance a customer up to a given amount and let them pick what they want (within reason). Peoplefirst Financial (now owned by Capital One Auto Finance) was one of the pioneers in this side of the business.

      Long story short, I have no doubt that a Toyota dealership would try to sell a late model Prius for that price. I also have no doubt that it could go to either a sumprime or prime customer. It all depends on the parties involved.

  • avatar
    saponetta

    dealer track book out is NADA. So that is a correct figure. Thats is the figure 99% of lenders are looking at. There is no way to carry that kind of money on that car for a subprime customer.


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