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Frugal Shopper: Trucks And SUVs Still Deeply Discounted Page 2

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2009 Cadillac Escalade Hybrid

2009 Cadillac Escalade Hybrid

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Which vehicles are the most in danger of sitting in dealer lots this year? Toprak thinks full-size hybrids—like the Chevrolet Tahoe Hybrid, GMC Yukon Hybrid, and Cadillac Escalade Hybrid—are among them. "Their gas mileage is not significantly better" than other alternatives, "and the price premium is just way too much," he explained.

For example, on a brand-new, $74,375 Cadillac Escalade Hybrid, TrueCar cites an average transaction price of nearly $5,300 off the sticker price and targets a "great price" of more than $7,300 off sticker in some trims. The smaller, higher-mileage 2010 Ford Escape Hybrid, starting at $30,585, is typically discounted less than $1,000 from sticker price.

Toprak said that the arrival of newer hybrid vehicles with much higher mpg figures, as well as plug-in vehicles such as the 2011 Chevrolet Volt and 2011 Nissan LEAF, will put more pricing pressure on older-tech hybrids, as those full-size hybrids lose some of their go-green luster.

"Many hybrid SUV prices are wrong by about $10,000," assessed Toprak, when you look at transaction prices and how long they've been dependent on incentives.

It's clearly a concern for some automakers. Kia completely skipped the 2010 model year for its Borrego—probably a smart move, even if it does intend to bring the model back—and the recently introduced 2010 Toyota 4Runner is already seeing discounts of nearly $1,000 just a couple of months after introduction. The Trail model, with the desirable off-road goodies, tops the $40,000 mark.

Toprak doesn't see the situation getting any better for automakers, so he thinks that to remedy bleeding residual values automakers might soon lower sticker prices on a number of trucks and SUVs, as a formal concession.

2010 Toyota 4Runner

2010 Toyota 4Runner

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"Some shoppers still shop based on MSRP," said Toprak, and those shoppers are completely skipping over some higher-priced but deeply discounted models they might be able to afford.

In the meantime, don't think the price on the sticker is anything close to what you'll need to pay, especially if you're looking at one of these once-hot vehicles. Keep checking those actual sale prices as you might be able to afford a lot more vehicle than you expect. The deals aren't going away anytime soon.


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Comments (2)
  1. GC has always been heavily discounted (~$7K) but the price has gone up tremendously in the past two years and the most popular engine now is the outdated and underpowered 3.7 liter. With the new model just around the corner, $10K off the inflated MSRP is not that impressive...
     
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  2. JKD, that's true. But I remember a time -- just a decade ago, maybe less -- when the Grand Cherokee was desirable and selling at or very near sticker (as was the Cherokee, even though it was outdated). Saying that $10k off sticker isn't impressive just goes to show how overpriced (in terms of MSRP) many SUVs are today and that some price adjustment is looking inevitable.
     
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