Some car prices higher after tsunami
Friday, March 18, 2011
DETROIT (AP) — The disaster in Japan could slow shipments of popular cars like Toyota’s Prius to auto lots. And many dealers are already taking advantage of expected shortages to raise prices.
Buyers will now typically have to pay sticker prices, instead of enjoying discounts that had been the norm for small cars and hybrids imported from Japan. Besides the Prius, models that suddenly cost more include Honda’s Insight, Fit and CR-V; Toyota’s Yaris; and several Acuras and Infinitis.
Small cars such as the Yaris, with a $12,955 sticker price for a base model, and the Honda Insight, priced at $18,200, are losing their typical discounts of 5 percent to 10 percent.
The price increases “will last weeks, if not months,” says Jesse Toprak, vice president of industry trends and insights for TrueCar.com, a website that tracks what cars sell for at dealerships.
Dealers are acting on the possibility that disruptions in car deliveries from Japan will cause a shortage of higher-demand vehicles. Demand will exceed supply.
So they won’t cut deals on those cars, Toprak says.
Car buyers rarely pay sticker price, also known as the MSRP or Manufacturer’s Suggested Retail Price. Companies typically offer discounts of a few hundred to a few thousand dollars off the MSRP. Many also provide low-rate financing.
On top of all that, there’s typically room for further negotiation. Toyota, for example, had been offering a $500 rebate on the Prius, plus zero-percent financing. And it offered a $1,000 rebate on the Yaris.
Many smaller cars and hybrids are built in Japan, where car manufacturing has mostly stopped in the aftermath of the earthquake, tsunami and nuclear crisis.
Toyota says it’s shut down production until Tuesday. Honda remains closed and hasn’t said when its plants will restart. A shipment of more than 1,000 Nissan and Infiniti cars that was headed to the United States was destroyed in the tsunami. At least one hybrid battery maker is shut down, threatening supplies of hybrid cars.
“Prices have firmed up, and the tsunami is only going to help that,” says John Hawkins, a Los Angeles-area dealer who runs three Honda dealerships.
Even before the disaster, dealers were reporting a shortage of hybrids such as the Prius, which had been in demand because of higher gas prices. The Prius uses a combination of electric and gasoline power and gets 51 mpg.
A month ago, Dave Conant said his Toyota dealership in San Diego had 57 Prius hybrids for sale. Today, he has three or four. Priuses carry a sticker price of $23,050 for a base model.
“We’re going to run out of cars,” he says.
So he’s no longer willing to make a deal.