Hammer Time: Two Steps To The Left
By on December 18, 2016
When you have over 120 pairs of eyeballs looking at the same exact vehicle at an auto auction, you know the price of whatever sells is going to be high.
So what do you think this 2014 Toyota Prius with only 344 miles went for back in late 2014 when gas prices started to crash?
$22,000?
$20,000?
Try $16,900.
Now before you offer a gasp or a raising of the eyebrows, let me ask you a quick question.
How many of you would want a slightly brown Prius today for that price?
Yep. This vehicle is pretty much the automotive novocain of the enthusiast community – but think about it. We’re only maybe 5% of the entire car buying world, and most of us opt to buy on the older used car side of the ledger because that’s where the deals are typically at.
How about the other 95% who may glance through Consumer Reports, play around the internet, and ultimately find themselves in the car shopping universe for just a few days?
Well believe it or not, as a guy who has been in the world of automotive remarketing for well over 17 years now as an auctioneer, car dealer, and part owner of an auto auction, I can tell you exactly what these folks end up doing.
They take a step or two to the left.
The ones who would usually look at a Prius that offers maybe 50 miles per gallon? They will look at a crossover that’s advertised with just having over 30 miles per gallon and say, “That’s good enough for me.”
The compact buyer? He or she will opt for the bigger engine and the greater power that is horsepower.
There is a reason why you’re starting to see more exposure for cars with hellaciously high horsepower ratings these days. Gas is cheap. And when gas is cheap, the money starts drifting back towards those models offering more grace, pace and space.
You may not jump in the icy cold that is 16 miles per gallon in a large pickup truck that can haul well over five tons. Most folks don’t jump to the extremes.
But, when you see a Chevy Corvette and Dodge Hellcat fighting it out on Yahoo, and you’re among the 95% that is merely just shopping for the here and now, chances are that if you find yourself at a dealership that sells those brands, you will consider the higher horsepower, better equipped versions of the model that interests you. Halo cars have a very subtle and effective way of making the other models in their line-up look just sporty enough to get into the mind of a non-enthusiast who may just want to have a little extra grunt for merging on the highway.
In today’s market a car like the Prius is going to start nosediving a bit when it comes to sales, especially if it’s low on features. This reality is not only true for the new and the near-new hybrid marketplace, it’s also true for the older hybrids as well that are no longer strong on the demand radar.
The 2001 Honda Insight you see here… I bought it for only $4000 at an auto auction way back in the spring of 2009. It had 145,000 miles, and thanks to a gallon of gas being closer to $2.00 back what would have normally cost me over $5500 at a dealer auction wound up being only four grand even.
There were other small things as well that helped my cause. The check engine light was on. The transmission fluid was a quart short, and the oil needed to be changed.
So I bought it for $4000, drove the Insight for approximately four years and 48,000 miles, sold it for $4000 in the summer of 2013 when gas prices were back at the $3.50 level. I did a similar formula with a 2003 Honda Civic Hybrid that I bought with 102k for $6500 around the same time, and sold for $6450, four years and 50,000 miles later.
So is this barely used Prius a good deal at $16,900? Compared to a new car, most definitely. But those in the industry who want to keep a car for the semi-long haul, especially us enthusiasts who like to hit em’ where they ain’t, can still do a whole lot better.
