Can the MSRP be gouged?

You and a few thousand other people...

The MSRP is set in stone by Toyota, but that has little to do with what the dealer's asking price on a Prius will be these days. The "S" only stands for "Suggested". The dealer is free to sell the car for whatever pleases him.

No, probably not, because there are a lot of people standing in line behind you who will pay over MSRP right now.

Good luck.

Tim

 

By the way, this is not called "price gouging." That term applies only to "essential goods or services... in anticipation of or during a civil emergency."

What you are about to experience at your local Toyota dealership is called "the free market."

Tim

 

Well it may not be called "price gouging" however, there are certain limits in my opinion what something is worth. Sure, the market determines what people are willing to pay for it. But the product whatever it is is not really worth such an inflated price.

In my opinion a car is only worth the MSRP. That price is based on certain factors and I am sure that the major factor in determining a car's MSRP price is the quality and type of equipment used to build said car. Therefore, a $25,000 car is not worth $50,000, will some fool pay that much, sure, but the car is not really worth that much.

This recent trend with people desperately trying to buy a Prius at such inflated prices is just panic. Dealers feed into that panic and therefore the price of the Prius has gone up too far over MSRP in my opinion.

If everyone looking for a Prius would consistantly refuse to pay over MSRP then there would be no market for such crazy markups, the dealers are only reacting and benefiting from the panic. I could see the price going up like crazy if Toyota came out and said they are not going to sell the Prius anymore in the U.S. But there will be another model year coming out and another one after that and so on. We know that other car makers are going to come out in a matter of time with comparable cars, so the panic now seems a bit crazy for people to be payig so much over MSRP.

So, to answer your question, no the price is not really price gouging because it is not the only car available and you don't need it to survive, but the pricing way over MSRP is really getting stupid and if more people refused to pay such crazy amounts over MSRP there would not even be this discussion.

If I did not get lucky and buy mine when there were still 21 on the lot, and I was looking for one now, I would just wait until the new models come out. I will never pay over MSRP for any car no matter how good it is.

 

No, I don't think the "sticker" price can be modified, because it's on the car when it comes from the manufacturer. There are laws for that thing.
But the dealer can charge over that price with weasel-wording like "market adjustment fee" or something.

 

Who needs "weasel-wording"? As Timwalsh300 said above what that is is 'free market'. The dealer is 100% within his rights as the owner of the good that you want to buy to charge as much or as little as he wishes for it including anything from $0 to 1,000,000,000 times the MSRP. The only constraints stopping him are:

1. Willingness of the buyer - As freshmtt said, if buyers weren't willing to pay more than the MSRP he would be stuck selling it for that. However, as long as there is some fool out there willing to pay a few bucks more than you for the car, that other guy will get it. Fortunately, at a high enough price even the most foolish say 'that's too much'.

2. Profit and loss - The dealer can certainly cut a deal with individual buyers for much lower than MSRP. Hell, they do it all the time. If you want to try it out, go 'window shopping' for a Suburban or similar large gas guzzler. I'm sure you can get a good bit less than sticker price plus a "cash back incentive" and all sorts of other funny stuff on top of it. The only thing keeping the dealer from going down to $0 is that he has to cover the cost of the car and operation of the dealership. And even then, he may take a loss on a car just to get it out of inventory.

3. Some manufacturers set limits - I'm not sure how this works in the car world, but I know in other industries there are limits that the manufacturer sets on how low of a discount a retailer can put on their product so as to avoid devaluing the product. The consequence of breaking such a limit is usually stated as being cut off from future product, but I don't know if any manufacturer has actually gone through with that.


In short, everything is negotiable in the world of car sales and you should try to cut as good a deal as you can, but as things currently stand be prepared to either pay over MSRP, wait a long time, or travel out of state to get your car. I did the last option with my first Prius when one came available in Vermont for MSRP. Good luck.

 

With all that is said before me, it's important to note that there still are some dealers out there who will NOT sell a car above MSRP. These tend to be those dealers that have a longer view of the world and want you to buy all of your new cars from them going out into the future. Personally, I place a lot of value on, what I perceive to be, the dealer's integrity and how much they value me as a customer. Before buying my Prius in December, I'd been purchasing Dodges from the same dealer for more than 25 years. They never tried to screw me over and clearly gave me the impression that they were interested in my repeat business.

 

This is probably why some dealers "weasel word" the markup. That way they can appear to stay within MSRP while really charging a premium.

Tom

 

Gee, what a great idea. Why didn't I think of that one??

Instead of just Priuses, let's all do this for fuel. How about no one buy gas until it reaches 35 cents a gallon as it was a few decades ago. And let's do it with groceries, and houses, and solar cells, and boats, and airline fares. Maybe the next administration could help us out and mandate under penalty of prison time for those greedy evil retailers super low prices for everything. Then we would all be rich and living large! Just like the good 'ole days!!

I'll start now! Who's with me??

Rick
#4 2006

 

For advice on how to buy a car from a dealer in the US consult Consumer Reports magazine, either in the nearest public library or online.

 

I have 10 bottles of cola. No one else around has cola. You can get some from the store but they have a 10 week waiting list. You want it cold and you want it now.

I bet you are gonna be ready willing and able to pay more than my regular price! So are others. So the price goes up........ get it now?

 

Toyota sure doesn't want a bad reputation (& if enough dealers charge over MSRP that might happen) but agree when it comes to a Prius there is no such thing as quick delivery and low price.

 

If you guys think this is bad, consider the example of the 2009 Nissan GT-R... base model starts just under $70k MSRP, but Edmunds says people are coughing up $80k, and I hear from other people that dealers are asking over $100k and people are stepping up and paying it.

It's what happens when something is in demand. Don't like the price a dealer is asking? Find another dealer. Some people here have flown cross-country to buy and drive their car back.

edit: Also, consider what was going on with Prius pricing a year ago. That's the other end of the demand/supply equation.

 

There are a lot of rich people around. I made $198K adjusted gross last year and consider myself on the lower end of middle class given how many people I know who make 3 to $400K a year. I own a modest house and have a car payment of $500 month with all the minimum expenses and taxes, it's barely enough to live paycheck to paycheck. I save lots of money by doing all my own vehicle maintenance(timing belts etc). I do all my own landscaping, and repair anything around the house that needs it from roofing, to electrical, to plumbing, etc. I'm super careful with every penny. I don't even pay for cable or satellite. Just the $15/month 3 at a time Netflix.

So it's just crazy to think that enough people are going to step up the plate to pay way over MSRP on a $70K car bidding them all the way up to the $100K range. What's the $100K ZR-1 going to go for? I'd pick it in 2 seconds over a GT-R.

 

HAHAHAHAHAHAHA

Oh man, if I didn't own a Prius myself, that might be enough to make me hate Prius owners.

 

Free market economy. Take the other end of the spectrum. A few years ago the gigantor SUVs were the hottest things on the market with the Cadillac Escalade, Hummer H2 and H3, Yukon, etc. Guess what they're going for now? BELOW MSRP (I think). The used car lots are full of these tanks and they're CHEAP.

 

$198k and you live paycheck to paycheck? You need a financial advisor...BADLY. Seriously...no matter where you live unless you have a family of 4 and your spouse stays at home, you should have no problem living comfortably an an adjusted gross of $200k.

You're talking about $12-14,000 a month net take home depending on what your interest &RE tax writeoff is.

You and I make about the same amount (I make a little less actually, depending on the year) and I have a $3,200 a month mortgage, maxed out cable, do absolutely zero car or home maintenance myself, we pretty much do anything we want and buy anything we want whenever we want and I have plenty left over every month...we eat out 3-4 times a week...dry clean all our clothes...

Sorry to judge, but you put it out there

 

The only financial advice I would get is to get out of the Bay Area. Half of our entire net goes just for mortgage and property taxes on a house we paid $550K for in 2002. Back then, that amount would buy you a townhouse in San Jose. After taxes, FBA child care(which comes out pre-tax thank god, and FBA medical), I net about $80K. Trust me, it's not much where I live. I'm *very* careful with my money. Most people I know who make what I make and live in the Bay Area have gone into massive debt or max out the equity on their houses. I've done neither and don't carry a balance on any credit card.

Years ago, in the early 90's, when I was making $30K, I was able to save more. That was before getting married, having children, having a mortgage, a bunch of medical expenses. If you looked at my credit card statement and checking account, you'd see food(we never eat out more than about 4 times a year), gas, utilities, etc. Just the basic necessities. I've dropped my PG&E bill in half by changing lights over to CFLs, installing occupancy sensors in all of the bathrooms and closets, tankless point of use hot water heaters, etc.

So yes, if we owned beater cars and rented an appartment, we'd be able to save quite a bit, but unless you live where I live, you have no idea what you're talking about.

 

198k you should be selling dollars, not buying them. you're in the top 3% or so, not the 'lower end' . somethings not right here.

 

Good lord...