How hot is your Prius? Dealers want 'em

How hot is your Prius? Dealers want 'em

BY TOM JOHNSON
Star-Ledger Staff

Want to get your hands on a Prius? So do Toyota dealers.
These days, many of them can't get enough of the hybrid, gas-saving vehicles on their lots.

In Manassas, Va., Miller Toyota is pitching its customers who purchased a Prius between 2004 and 2007 with an enticing offer: The dealership will buy back your vehicle for the original price with only a few questions asked.

The 10-day promotion is the brainchild of Wes Snoots, used-car manager for Miller Toyota, which, like dealers around the country, has sold out its inventory of the hybrid car through the end of the year.

"The Prius market is the hottest market out there right now," he said. "We can't get any new cars."
The unusual marketing ploy underscores how frantic consumers are to buy hybrids at a time when the nationwide average price of gas is at a record $4.114. (The average price in New Jersey yesterday was $3.982, down from $3.992 a week ago, according to AAA.)

By industry accounts, the Prius is the fastest-selling car in America. In June, the hybrid's turn rate, industry jargon for how long a model sat on a dealer's lot, was four days, said Tom Libby, director of industry analysts for the Power Information Network, a branch of the marketing company J.D. Power Associates. The industry average is 58 days, Libby said.
"The supply/demand situation with the Prius is so out of whack it is creating a really unusual situation," he said.

Toyota, like most other auto manufacturers, suffered a double-digit decline of 21 percent in June sales compared with the previous year. Sales were markedly down in pickup and sports utility vehicles. Earlier this month, the company announced it would start producing the Prius hybrid in the U.S. in 2010.

U.S. sales of hybrids jumped 27 percent in January 2008 over the previous month, with more than 22,392 cars sold, including 11,379 Priuses. The Prius, which sells as low as $21,500, can get 48 miles per gallon. The hybrid gas and electric engine typically shuts down the gasoline portion and runs solely off its battery pack at low speeds.

At Toyota of Morristown, customers coming in seeking to buy the Prius are told there is an eight- to 12- week wait that might get longer, said Tim Morley, sales manager for the dealership. About 30 percent of the people who come in to the dealership ask about the hybrid, he said.

"The market has definitely shifted away from the SUVs and larger vehicles to Prius and the other energy-efficient vehicles," Morley he said.

So much so that Miller Toyota claims it can resell a Prius it buys from its customers at a price higher than the sticker price, although Snoots would not say how much of a premium the dealership was making on the used car sales.

In buying back the hybrids, the dealer vowed to purchase it at the original selling price, but not above the factory window sticking price. If the car has more than average mileage (15,000 miles per year), the company said it would offer a price adjustment.
Snoots declined to say how many customers bit on the unusual offer, but noted the response has been "very good." The offer is good through Saturday.

The practice is not likely to be condoned by Toyota, but there is little the manufacturer can do to prevent a dealership from buying back the vehicles and selling them at a higher cost than the sticker price, Libby said. A spokesman for Toyota on the Miller tactic could not be reached for comment.

In New Jersey, Muller Toyota in Clinton sent notice to all of its customers offering to buy back certain vehicles, including the 2006 Toyota Highlander Hybrid, but the offer is completely unrelated to what the dealership in Virginia was doing, said Jim Pesce, director of purchasing for the dealer.

"It's a marketing letter intended to try and drive traffic to the store," said Pesce, who said the dealership has sent out similar letters in the past. In the most recent letter, the dealership noted the Highlander Hybrid "might be worth more now than it was three months ago."