Archive for March, 2011

japan-Toyota-PriusThe ripple effects of the catastrophic earthquake in Japan are just beginning to arrive at our shores and will bring big changes in the market for the Toyota Prius.  This week, Northern CA Toyota dealerships learned that their allocations of new Prius were reduced by as much as 80%.  That means in the next 2-4 weeks, dealers will receive only a small fraction of the new vehicles they would normally get.

And the situation will worsen before it gets better.   Toyota production is offline for at least the next several weeks, and possibly longer, depending on how the crisis in Japan develops.    Given the time it takes to build and ship a car, dealerships in the US could be without new inventory for several months entering the peak summer driving season.

At the same time, ongoing instability in the Middle East has sent the price of oil surging over $100/barrel.  After a brief respite caused by the disruption of demand from Japan, the price will likely continue climbing upward.   Gas at the pump, already at $4/gallon, will resume its upward rise toward $5/gallon, perhaps by Memorial Day.

The combination of increasing demand and restricted supply will result in a dramatic change in the market for Prius very shortly.  If you can still find a new Prius for sale at or near invoice, grab it.  Within days, you’ll likely see dealerships raise their pricing on 2011 Prius.  The 2.9% financing deal currently offered by Toyota is also likely to go away by the end of the month if not sooner.

We’ll continue to post updates as the situation develops.    Effective Wednesday, March 16th, pricing on all Prius that we broker will be increased to MSRP until further notice.

2011 Toyota Prius

2011 Toyota Prius

So far, 2011 has started out a lot like 2008 for the Toyota Prius.  The similarities are eerie!

2008 began with a glut of inventory and very soft pricing.  You could find any model/color Prius for hundreds below dealer invoice.   Then Toyota cut back on production and stopped sending as many cars to CA dealerships.  And the price of gas began to rise.  Quickly.  As a result, the market shifted dramatically.

By April 2008, new Prius were in short supply.  Meanwhile, demand was surging as fuel prices raced past $4/gallon and consumers began to feel the pain at the pump.

Any dealership that still had a new Prius on the lot was selling it for MSRP.   Pre-owned Prius were selling for large premiums over book value.  Waiting lists began to build.   And people who put off a Prius purchase in February, were finding that the same car would cost them $3,000 more in May–if they could find it!

We’re starting to see a similar turnaround in 2011.   The year started with soft pricing and heavy promotions and incentives from Toyota.  There were 0% financing, cash rebate deals, and prices below dealer invoice.    Now, financing rates are creeping up, cash rebates are smaller, and dealer prices are firming.  Meanwhile, gas prices have surged to $4/gallon and show no signs of stopping, as each day brings new stories of instability in the Middle East.

Street prices on a new Prius have already increased $1,000 from what they were in January, and the trend is up.  A firming economy, rising gas prices, and the fear of future oil shocks will increase demand for America’s most fuel-efficient car, and you’ll likely see higher prices through the Spring.

Starting this month, we’ll publish our broker pricing for representative new Prius models.    You can use these figures as a shopping guide (if you find a lower price, it’s a good deal), as well as a benchmark to identify trends.

And if you’re thinking of purchasing, now would be a good time.

2011 Toyota Prius Pricing for March, 2011 (includes $500 rebate, excludes tax and license fees)

Model/Options MSRP Invoice Our Price
Package II $24,079 $23,029 $23,029
Package III $25,079 $23,770 $23,770
Package III with Nav $27,009 $25,390 $25,390
Package III/Nav/Solar Roof $28,809 $26,838 $26,938
Package IV/Nav/Safety Connect $30,190 $28,400 $28,600

For questions or if you are interested in purchasing a new or pre-owned Prius, contact Gene at Gene@Priusfinder.com or call (510)339-3646