2014 Toyota Land CruiserEnlarge Photo
What the Land Cruiser, as well as a lot of vehicles that might seem priced unusually high, has is a well-respected badge and a storied reputation that together command a steep premium—and arguably, a well earned one, to those fans.
“Build a rich history like that and you also have a rich brand image, brand value, and you’re willing to sell at very low volume, then you can command the price,” said Eric Lyman, VP of industry and insights for TrueCar, and affiliated residual and resale value authority ALG.
Shockingly high doesn't always mean overpriced
Some might see the Land Cruiser as shockingly high in its price—more than $80,000—yet it’s not overpriced. Looking at the very low level of discounting that happens at the dealership, as well as its top-notch resale values, it’s priced just right for what it is, within the market.
That also, for the most part, applies to the Jeep Wrangler. It’s a vehicle that, at $40k or more in some of its four-door Unlimited trims, seems shockingly high to those who think of it as an simple, basic truck. But there’s nothing else quite like it on the market today, and with values propped up, Wrangler fans have clearly decided it’s worth that.
“They might be perceived as overpriced niche products, but they have some of the highest retained value because they’re niche vehicles,” explained Lyman of the Land Cruiser and Wrangler. “Someone who has no knowledge of the heritage isn’t going to see the value of this vehicle...but someone who’s followed them since they were young will want one."
Sticker shock takes on an entirely different meaning when it applies to an all-new model, like the Cadillac ELR, a model that’s both shockingly high in its sticker price and definitely overpriced for the market.
The plug-in hybrid luxury coupe starts at $75,995, and blows past $83k fully loaded.
For new models, first (pricing) impressions mean everything
At present, the ELR isn’t selling in the numbers anticipated. It’s not even selling, significantly discounted, in the numbers already produced. Based on the rate of sale so far, U.S. dealers have a gasp-inducing year of inventory sitting around.
“It probably is the most prominent example of an overpriced car that we’ve seen, simply by looking at the inventory,” said Lyman.
Lyman notes that getting a case like the ELR back on track is an extreme challenge for a brand. The ELR arrived just at the time when there was a recalibration in pricing for a number of electric cars and plug-in hybrids, and as gas prices weren’t as big of a concern as they’d been, perhaps, when the car was being developed. Product planners also grossly misjudged the value that shoppers would place in the powertrain.
If an automaker strikes out on pricing in such a profound way, Lyman says that the best option isn’t to drop the price right away, but to wait until it can give the vehicle some kind of overhaul—then push the revamped model out under the guise of being a better car, with increased value and features, at a lower price.
Will Cadillac save the ELR by repositioning it? That’s something we can’t yet answer, but click on to see six models that could seem very pricey if you’re not tuned into the fanbase or the marketing message.