Sheila Catoira wanted a fuel-efficient Toyota Prius hybrid so badly, she found a used model online and paid $1,000 more than the car would have cost new. With the demand for a gas-electric Prius far outstripping supply, some buyers are plunking down a premium for cars that are thousands of miles old.
LOS ANGELES Sheila Catoira wanted a fuel-efficient Toyota Prius hybrid so badly, she found a used model online and paid $1,000 more than the car would have cost new.
With the demand for a gas-electric Prius far outstripping supply, some buyers are plunking down a premium for cars that are thousands of miles old. The trade-off: They don't have to wait for months on dealers' waiting lists.
"I figured that if I can get it right away, it was well worth it," said Catoira, 31, a teacher and self-described environmentalist in San Diego.
Other desperate buyers offered more than the $27,000 Catoira paid, but seller Sev MacPete said he refused to fully exploit the frenzy.
"I could have sold it for a lot over list, but I didn't feel like I can do it in good conscience," said MacPete, who happens to be the president of the Prius Club of San Diego. He wanted to sell the 2004 model after only 5,000 miles because he had just paid sticker price for his second Prius, this one fully loaded with options.
Far from sticker shocked, buyers have in the past year have paid private sellers and used car dealers $1,000 to $3,000 above the advertised price of a new 2004 or 2005 model, according to Irvine-based Kelley Blue Book, which tracks used car prices. Older Prius models are not seeing the same phenomenon.
"There are some people who want to be the first one on the block to own a Prius and to them, it's worth paying a couple of thousand dollars over sticker," said Jack Nerad, Kelley Blue Book's editorial director.
Rarely do second-hand cars sell for more than their new counterparts, since cars typically lose value almost immediately. The only other instances automotive experts cite are luxury vehicles such as the Ferrari and hot new releases. The Mazda Miata and Mini Cooper, for example, were so popular when they first came out that buyers paid a premium for used models.
The Prius, which lists for between $21,000 and $26,000, is the first economy car with a higher resale value, according to automotive experts. Its hybrid competitors, such as Honda's Insight and Civic, haven't seen the same resale boom because they aren't in such demand. The Prius, which underwent a makeover last year, is considered by many to be better-looking and more versatile than its competitors.
When the Prius first rolled out in the U.S. in 2000, buyers had to wait six months on average because Toyota underestimated demand. As Toyota increases its production schedule -- the automaker plans to double to 100,000 the number of Prius cars for the North American market this year -- the wait has dropped to an average of two months, depending on where a buyer lives.
Hybrids combine an electric motor with a gasoline engine to produce less pollution and better mileage. Volatile gas prices are a major impetus behind the rush to buy high-mileage hybrids.
Although hybrids represented less than 1 percent of the 17 million new vehicles sold last year, the U.S. hybrid market has grown by more than 960 percent since 2000, when 7,781 were sold, according to data released last week by the Southfield, Mich.-based firm R.L. Polk & Co.
Toyota is the first automaker to commercially mass-produce and sell hybrid cars. Its Prius dominated nearly 65 percent of the U.S. hybrid vehicle market last year, with 53,761 new cars registered.
Most Prius owners keep their hybrids, but the few who will part with their cars may want an upgraded model or realize that a gas-electric vehicle doesn't suit their needs. Other sellers see the chance for a quick buck.
But there are some signs that the premium market for used Priuses may be cooling. There are more new Priuses on the market as Toyota ramps up production. Meanwhile, the Prius faces new competition from other hybrids coming out this year including the Lexus RX400h, Mercury Mariner and Toyota Highlander SUVs.
Data collected by Edmunds.com, which provides online vehicle buying information, show the resale price of a 2004 Prius in recent months is at or slightly below the sticker price of a new one. That is still a feat, given that most used cars depreciate on average about a quarter of their sticker value after a year, said Jesse Toprak, director of pricing and market analysis at Edmunds.com.
"It's unparalleled," Toprak said. "It has never happened before to this degree."
Source: Associated Press