Can the MSRP be gouged?

I have always paid under MSRP as this price already has a built in profit margin for the Stealerships. So you could say MSRP is a gouge in itself.

 

That sounds like me, guess why I will just be a Prius wannbe. I am not paying over MSRP and will have to think about it long and hard before paying MSRP.

 

Look at it this way: MSRP is just an arbitrary number dreamed up by the marking people at Toyota. If they had anticipated the current demand, they would have come up with a higher MSRP. Would your dealer's current asking price be okay with you if it was the official Toyota MSRP? MSRP is irrelivent, other than as a benchmark. You have to ask yourself what you are willing to pay for a Prius - what is a Prius worth to you? That's the only number that matters.

Tom

 

The ironic thing is if Toyota boosted MSRP $5K, more people would be willing to pay that premium than they are now because they wouldn't feel like they're getting screwed by the dealer. The irony is that more money would be going over sears rather than staying in the local economy.

 

If you've got it on the hip, it ain't nothing but a number.

 

In the San Jose Area, the median income is for males is $49,347 versus $36,936 for females. THAT's the middle class.

In the wealthiest census area of New York City, you'd STILL be just a hair above the median income.

Assuming you didn't refinance your house at the height of the market, your house payment should be about $3700 (if 30 year fixed, 7%). After your taxes and FBA Medical bills and the mortgage, you'd still have $3000 to play with.

I'm not knocking you for making good money, of course. That's fantastic, as it's also great that you switched to CFLs, and drive an environmentally friendly car and all that, and that you make good money. But. You need to get some perspective about how much people REALLY make, and what it actually means to live "paycheck to paycheck." It's not "Oh, I didn't put any money away, outside of the 401k, because I bought everything I had a whim to buy this month." It's "Maybe if I take the kids to grandma's this weekend, they won't notice the water's been shut off again." It's "If I take out a 200% interest loan from Quicky Cash, I can pay for groceries this month, and I'll worry about next month later."

When you talk about how $200,000 a year isn't enough to "pay the bills" you might as well be saying "Let them eat cake," for the same reason nobody took Latrell Sprewell seriously when he said he's "got kids to feed."

 

RE: MSRP
As I've only bought used until now, I find it remarkable how myopic new car buyers get over the MSRP. I can definitely see being concerned over paying too much, but MSRP on a Prius is nebulous in this market. With demand, I think dealers are doing us waitlisters a favor by not going 1000+ higher. Toyota knows how buyers obsess over this and, I fear, will ease our pain with a steeper re-pricing of the '09s.

Not a year goes by that I don't sympathize more and more with those who make close to median income. Middle class by definition of what middle class used to be and as defined by middle incomes are different concepts today, IMO.

 

Yea, that figure would be about 10 years out of date and includes all the high school students and workers of similar age making minimum wage. BTW, a family living on an income of $50K in the Bay Area qualifies for PG&E's Care program which comes with a 2/3rds reduction in rates. It's pretty much below the poverty level. If you're a single male renting a room for $600 / month and you take public transportation, you can do OK on $50K a year and even save a fair amount.

The average engineering salary in San Jose, CA as of last month was $144K. Fortunately, the Bay Area is one of the few places in the country where technical salaries have been rising significantly in recent years. But that just compensates for the the fact that after the dot com bust, salaries dropped and didn't rise for 5 years.

 

Actually, those numbers are from the US Census Estimates for 2006. Median family income, $83,089, with a median family size of 3.64 persons.

There's not really an argument here, the fact of the matter is, $200,000 / year is better than 97% of families nationwide, and is well over twice what the "middle-class" makes even in the higher-living-cost San Jose area. And that's great for you. The one thing it's not is paycheck-to-paycheck. If you're hanging out with folks making $300,000 - $400,000 a year, then they're higher up the rungs of upper class, but it doesn't make you lower-middle-class. Not when 90%+ of the households in your area have a lesser income than you.

 

There are many places I could live in the US where $200K a year would afford me a very nice lifestyle plus a decent and steady savings but I can't make that kind of money in those places. Like I said, you really have no idea what you're talking about unless you actually live here.

There's a common saying/joke around here that started about 10 years ago:

You know you live in the Bay Area when you make $100K a year and all you can afford to drive is a Honda Civic

 

Here are the figures for our county, as quoted from Wikipedia:

The median income for a household in the county was $47,062, and the median income for a family was $53,228. Males had a median income of $35,719 versus $25,778 for females. The per capita income for the county was $24,686. About 3.30% of families and 5.40% of the population were below the poverty line, including 6.40% of those under age 18 and 4.50% of those age 65 or over.

Tom

 

Well, I'm clearly not going to get one of those anytime soon (GT-R or ZR-1, doesn't matter which), so I couldn't tell you.

Also: I live in the same geographical area as you, make less than you (though still plenty), live in an overpriced townhouse bought in 2004, pay $900 a month for the loan on my Prius (2 years, no interest), and yet am still pretty darned comfortable, even with the savings, 401k, and ESPP deductions factored in. What's the big line item in your budget that makes things just barely meet for you? I'm not sure I can think of one, unless you happen to live in a million-dollar-plus house.

 

Mortgage($3200/month) + Property tax ($600 / month)
Daycare ($1000 / month) $5K of that a year is tax deductible.
Car payment($504/month)
Gasoline (we both have long commutes and in opposite directions) $800 / month
Insurance(Auto, Home, Life) $400

Just those alone add up to $77K a year. That's before food, other vehicle expenses, medical that insurance doesn't cover, utilities(electric, gas, landline phone, alarm system monitoring, cell phones, cable modem, garbage), various home repair items.

I have a nice spreadsheet which I use for budgeting. Every recurring expense is in it.

Not only am I in the 50% tax bracket, but I get hit with AMT every year which pretty much wipes out the property tax deduction.

 

Not for me it doesn't. In 2 years when Toyota is building the Prius here in the states and churning them out a dime a dozen, what do you think these used ones with 50k to 100k miles are going to be worth then? I am looking down the road when I buy something like this, not just at today. If the MSRP on them was anymore than what it is, I wouldn't look at them in the first place.

 

I see. So it's daycare + gas that does it, I suppose. That and your total housing payment being about 25% more than mine.

 

You need a good financial advisor my friend. Trust me, there are people out there that can structure this so that more of your income is protected.

 

If I made as much (I don't even make it in the ballpark) I would have about the same lifestyle as you. And I know I'd be able to put a good deal away for later. I'm a bit on the poor side in comparison and your mortgage is more then I make in a month. Mine is less then $750 mo. including the taxes and insurance, My Prius Payment is only $295 <--the wife is a good negotiator. And I still have the maxed out DirecTV with the HD package. Only pay $50 week for daycare for the two days a week my wife goes to school.

 

If you've got a name, send it my way, but they'll probably tell me the same thing the last 5 did.

 

Wow, even with a Prius you spend $800 a month on gas? I know its for 2 cars, but still that's a lot. That must be some commute.

I do agree with everything you say about how making $198k a year for a family in the Bay Area (also in So. CA) is on the lower end of middle class. People who do not live here really do not have any idea the exuberant costs we have to pay. In L.A., for example, a decent house in a safe neighborhood with good schools and close proximity to the job centers will run you $700-800k mimimum. And these are houses you could probably buy for $100k or less in the midwest, and most of these houses are old and in need of major repairs/updating such as electrical, plumbing, roof, HVAC, etc. Buy in a cheaper neighborhood, and most likely it'll be gang infested, very far from work or you'll have to send your kids to private school because 2/3 of the kids in the local public schools are on the free lunch program. Not to mention everything else here is more expensive, such as gas, insurance, food, utilities, taxes, medical care, etc.

 

I can send you a name, but it would be someone in DC, you need someone who can sit down with you out there and look at everything. You've seen 5 and they can't do anything to help you? Nothing to help protect your taxable income? That can't be...

My situation is different because I work on a 1099 and I itemize business deductions, so its easier for me to protect my income, but there has to be something you can do, even something that may not help now but might begin to help in the future.