[jrlittlejr]

Howdy, I've got a 2003 Prius with nav that has 35K miles on it. Like many others on this list, I've been looking at selling it used, and upgrading to a 2006. I've been shocked... and a little bit surprised... by the high prices quoted by dealers and ads for used Prius. My car "private party" used price on Kelly Blue Book is $19,900.

Here is my theory: I think the used car prices for Prius and other hybrids will fall around $2000 starting very soon.

Reasoning: The federal tax deduction was $1500 in 2005, which was about a $600 (depending on your tax bracket and alternative minimum tax) net tax savings for most people. Starting in 2006, the federal tax CREDIT will be increasing to around $3000 NET. I live in Oregon, where we also get a $1500 state tax credit for buying a new hybrid. So in 2005, the total tax savings was around $2000, but in 2006 it will be around $4500.

Waiting list aside... why would anyone buy a used Prius with 35K miles on it for $19K when they can buy a brand new one (similarly equiped) for around $25K and get $4500 in tax savings?

What do you all think?

Jim

 

[hyperion]

I wouldn't put much faith in the Kelly blue book as a private party and the dealers pretty much ignore it. It's supply and demand in the hybrid market, just as it is in the oil market.

 

[grovey]

I think some people don't know about the credit and others can't wait two months to get a new car. But come January, I think used Prius's have to go down 3000 at least.

 

[tideland_raj]

Reasoning: The federal tax deduction was $1500 in 2005, which was about a $600 (depending on your tax bracket and alternative minimum tax) net tax savings for most people. Starting in 2006, the federal tax CREDIT will be increasing to around $3000 NET. I live in Oregon, where we also get a $1500 state tax credit for buying a new hybrid. So in 2005, the total tax savings was around $2000, but in 2006 it will be around $4500.

Waiting list aside... why would anyone buy a used Prius with 35K miles on it for $19K when they can buy a brand new one (similarly equiped) for around $25K and get $4500 in tax savings?

Jim, you underestimate the lack of supply issues on Toyota's side, and the unbelieveable lack of patience on the part of consumers. I do agree that the price may take a hit in January, but keep a few things in mind
1) The tax deductions/credits are not known by all buyers (some actually just buy it because they like it)
2) The credits may bump up against AMT (ie, if you make enough), and therefore be useless to a large chunk of people. AMT is no longer a rich person's problem.
3) The credit goes away for Toyota after certain time (forget how long it is).

Fact is, unless Toyota rapidly increases supply (they'll probably boost it somewhat, since the real winner of late has been Honda -- people who still want a new car that's hybrid will choose that) used Priuses will still be worth about what they are now.

Most people still haven't realized that ~$3/gallon is probably here to stay (esp. since the Oil companies want it that way)... my coworker did the math and realized that the gas he spent each month on his Silverado for the past 3 months was greater than the monthly payment on my Prius...

 

[coloradospringsprius]

IMO, the #1 factor driving used Prius prices for the foreseeable future is gas prices. If they stay high, demand will stay high.

 

[hyperion]

Filled up at $2.31 this afternoon. Price has dropped 16 cents a gallon in the past two weeks and thank you god, heating oil has dropped 20 cents/gal
Maybe the media jump on the oil companies record profits this year has something to do with it.

 

[G. McCurdy]

Filled up at $2.31 this afternoon. Price has dropped 16 cents a gallon in the past two weeks and thank you god, heating oil has dropped 20 cents/gal
Maybe the media jump on the oil companies record profits this year has something to do with it.

You might be right. It is still around $2.69 in So. Cal. where I'm at. Still, I see quite a few large pickups driving off the lots with new plates so maybe it is also helping to stimulate the SUV and pickup sales as some people are possessed about owning those vehicles.

I'm also speculating the Prius sales will slow down as the gas prices fall along with the resale value. I'd guess if this happens, then it won't be a seller's market until fall. May as well hold onto the used Prius as you'll be getting essentially free usage until the gas climbs along with the resale.

However, next fall when it starts the cyclic climb, it will be interesting to watch and all bets are off.

 

[DanMan32]

The full credit will probably only be available for the first 3 quarters of 2006 for Toyota vehicles, especially if the Lexus brand counts against Toyota's 60K quota. I do figure on Toyota selling 60K hybrids in 6 months.

Gas prices have come down to as low as $2.31 in some areas. Where I live, prices are almost 20 cents higher than some towns I pass through on my way to work.

 

[ElectronMotion]

Used Prius sales...

Used Prius sales appear to be VERY slow in my area (which will remain nameless since I have a 2004 Prius for sale.) I will say it's out west.

In 6 days so far, I've only had 2 calls and neither one was interested enough to come out and take a look at my car with package 8 which includes GPS nav. My car is either "mint" or close to it. My asking price is slightly less than blue book and about $3000 less than some car dealer ads I've seen for a similar vehicles. My ad also added the words "or best offer" (OBO). The newspaper that I have it advertised in probably reaches close to a million readers.

I did get an internet offer for $3000 less than my asking price. I fully expected my phone to be ringing continually until I sold the car. I will probably end up trading it in on a 2006 unless things turn around. I may give eBay Motors a shot, but in casually checking out their Prius results, it looks like I would take a $2500 hit below my asking price (again, slightly less than blue book.)

I'm starting to believe that the next year's tax credit has dried up the used Prius sales BIG TIME unless the price is cut to match the coming tax credit savings.

 

[janets98]

After reading the headlines, if the oil companies know what's good for them prices will continue to fall.