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Dumping your gas hog?

Discussion in 'Prius, Hybrid, EV and Alt-Fuel News' started by Godiva, Nov 12, 2005.

  1. Godiva

    Godiva AmeriKan Citizen

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    Also compares H2 and Prius on depreciation and discusses the problem with the "employee pricing" sales gimmick.

    "For example, the Kelley Blue Book wholesale value of a good condition 2003 Hummer H2 with 30,000 miles was $30,285 at the end of the 1005 third quarter, down a whopping $5,115 since March, or 14.6 percent. The value of a 2003 Prius with comparable mileage, on the other hand, had declined only $640 from $15,450 to $14,810. "

    Dumping your gas hog?

    "Alas, that probably understates the hit that low-mpg car owners will eventually take. Six months ago, Autotrader.com listed 1,007 model year 2003 Hummer H2s for sale. Recently, the number listed had soared to 1,296. During the same period the number of 2003 Priuses offered declined from 187 to 98.

    Detroit didn't take the money straight out of consumer pockets, but every dime, and then some, of "employee pricing" that benefited new car buyers came at the expense of existing car owners. More people are now further upside down on their loans. That means summer sales came at the expense of future sales: Few owners will be in a position to buy anytime soon."
     
    #1 Godiva, Nov 12, 2005
  2. micheal

    micheal I feel pretty, oh so pretty.

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    Interesting to see this approach to the equation. I was surprised to see the comments about how the employee pricing hurt resell values and lead to people staying in their cars longer. Especially with the new red tag pricing coming out soon from GM (this new program was mentioned on a national news show today).
     
    #2 micheal, Nov 13, 2005
  3. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    There's a guy at work who insists that he can't afford to trade in his Suburban. He claims that he would take too great a loss on trade-in.
     
    #3 TonyPSchaefer, Nov 13, 2005
  4. Jack 06

    Jack 06 New Member

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    If you cut the top off a Suburban and half-bury it, it could make a nice planter.
     
    #4 Jack 06, Nov 13, 2005
  5. plasm

    plasm New Member

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    He should view the price of the Suburban as a "sunken cost" (ignore it since you can't do anything about it) and consider only impact of any decision on future cost.

    Plan A: Stick with Suburban
    high monthly payments, high gas bill, high center of gravity

    Plan B: Trade in for Prius :D
    lower monthly payments, much lower gas bill, (and better for environment, USA's oil dependency, etc etc)

    Seems Plan B is a win-win situation. Not selling the Suburban because it would be a loss is like riding a stock into the ground because the price is lower than you bought it for.
     
    #5 plasm, Nov 14, 2005
  6. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    oh I agree with you, Plasm. I've tried a line of logic similar to that one. It didn't stick. I try to provide a solution once. If they snuff it off, it's not worth my time to repeat it.
     
    #6 TonyPSchaefer, Nov 14, 2005
  7. altaskier

    altaskier New Member

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    The problem with those who have "negative equity" in their present car (i.e., they owe more than the trade-in value) is that the bank won't let them ignore it. They would have to continue to pay their existing auto loan, plus additional money on a new car purchase unless the trade-in value on the monster exceeded the purchase cost of a Prius.

    But in general the free market works, albeit slowly: the increased cost of gas is pushing more people to think smaller when they look at new vehicles.
     
    #7 altaskier, Nov 15, 2005
  8. ibchawz

    ibchawz New Member

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    I opted for plan B.

    1. I had a Dodge Durango that was averaging 11.5 MPG city and 14.5 MPG highway.

    2. Add in the fact that I only had the Durango for 2 years and made 7 warranty repair trips. I was tired of the unreliability.

    3. Even though I was upside down on the loan and got less than blue book trade in value, my new monthly payment is actually about $100 less per month.

    ibchawz
     
    #8 ibchawz, Nov 16, 2005
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