Seems Like a Ripoff
#21
04-30-2006, 08:16 PM
Re: Seems Like a Ripoff
Originally Posted by phoebeisis
The HCH is a great car, and with the tax credit it is a bargain even at full list.It is essentially a EX Civic auto, and the Civic EX isn't being discounted much-maybe $500 or so.You will pay at least $18500 for a EX Civic. A HCH is about $20,000 after the credit at full list.I mentioned the HCH that sold for $21000;it was $18500 after the credit.
Is it worth $1500 more than an EX?It matches the EX in everything but acceleration.It is at least 10 mpg better than the EX.I'm a pessimist and drive mainly in a city, so let's assume 25mpg vs 35mpg.The EX will use 4000gal/100,000 miles; the HCH will use 2857. Call it 1140 gallons lessover 100,000 miles. You will save about $3400 in gas at $3/gal over the life of the car.You will start "making money-breaking even" at about 60,000 miles.At $2/gal the HCH will breakeven vs the EX at about 95,000 miles.
Now this is comparing it to a very efficient car-a Civic.Compared to a Focus,Neon,Caliber,HHR,Cobalt,all the Hundai products and all the Kia products-it breaks even earlier.The Focus with the best 4cyl Mazda motor will take longest to overhall.The Mazda 3 would take about as long as the EX-it is a nice car(not a Honda though).
Heck, the tax credit makes buying a HCH ,and to a lesser extent the Prius, almost like stealing.They are cheaper,and better than their competition.The dealers are the fly in the ointment, of course, but you will find one that will go list or under list soon enough.The Toyota flies are worse than Honda flies(in general), especially Gulf States Toyota dealers.
At $22000($19,500 actually) the HCH is a real deal.Especially with potential gasoline price increases on the horizon.
I have run on. Luck,Charlie
Is it worth $1500 more than an EX?It matches the EX in everything but acceleration.It is at least 10 mpg better than the EX.I'm a pessimist and drive mainly in a city, so let's assume 25mpg vs 35mpg.The EX will use 4000gal/100,000 miles; the HCH will use 2857. Call it 1140 gallons lessover 100,000 miles. You will save about $3400 in gas at $3/gal over the life of the car.You will start "making money-breaking even" at about 60,000 miles.At $2/gal the HCH will breakeven vs the EX at about 95,000 miles.
Now this is comparing it to a very efficient car-a Civic.Compared to a Focus,Neon,Caliber,HHR,Cobalt,all the Hundai products and all the Kia products-it breaks even earlier.The Focus with the best 4cyl Mazda motor will take longest to overhall.The Mazda 3 would take about as long as the EX-it is a nice car(not a Honda though).
Heck, the tax credit makes buying a HCH ,and to a lesser extent the Prius, almost like stealing.They are cheaper,and better than their competition.The dealers are the fly in the ointment, of course, but you will find one that will go list or under list soon enough.The Toyota flies are worse than Honda flies(in general), especially Gulf States Toyota dealers.
At $22000($19,500 actually) the HCH is a real deal.Especially with potential gasoline price increases on the horizon.
I have run on. Luck,Charlie
Another well thought out and written post btw. Cool.
#22
04-30-2006, 08:18 PM
Re: Seems Like a Ripoff
Originally Posted by bilbro
I can't speak for Honda's strategy around supply and demand. My inclination is that Honda would only benefit by selling more cars, even if the selling price were to go down a bit, but I'm sure there are many dynamics I don't know anything about. As far as value, I believe the HCH is a very good value. I'm sure the cost to produce is higher then the EX, not to mention the R&D and engineering expenses that need to be recovered on a fairly small volume of vehicles.
I certainly feel I got fair value for my purchase price, and that will only get better if gas prices continue going up.
I certainly feel I got fair value for my purchase price, and that will only get better if gas prices continue going up.
I do note they fixed that 62 mile bug thingee quite quickly within several months of first production car. QA.
#25
05-01-2006, 01:57 AM
Re: Seems Like a Ripoff
That makes good sense. Engine types are normally sourced from a single factory and this must be especially so with the very complex units that we enjoy. I guess that containers full of complete engine assemblies will be shipped across the Pacific where finished cars currently cross. The Civic Sedan is already made in the US so the blending together of the new production should be a relatively smooth process. I guess too that it will have some tax advantage for Honda?
#26
05-01-2006, 06:08 AM
Re: Seems Like a Ripoff
Originally Posted by bar10dah
I don't think it's a rip-off (although, I do agree with your frustrations) but I do see it as demand/supply. There's a cross-over point in which producing MORE of an item raises it's production costs. Perhaps, and I'm not saying this is the case, Honda is operating at their "equilibrium" production/cost and the public just wants more than they can produce? Look up the cost of guns versus butter on the internet. You'll get a good explanation of what I'm talking about.
So, in my opinion, Honda is using this to its advantage. By producing only about 15,000 HCHII's per year, Honda not only keeps the price up, but also is able to use the federal income tax credit as a selling point for 4 model years!
Producing at equilibrium....NOT HARDLY! Quantity demanded is SO far above quantity supplied...hence Honda has created a shortage of HCHII's as I described above.
A rip off? I personally bought my HCHII a couple of months ago when gas prices here in Dallas, Texas were about $2.25 per gallon. With gas prices near $3.00 per gallon today, I am very happy with my choice to trade in my 2001 Accord EX-V6 on the HCHII. Do I miss some features? Sure I do! But I don't miss pulling into the gas station!
#27
05-01-2006, 06:59 AM
Re: Seems Like a Ripoff
Around here the going-in position to buy any Honda is MSRP, hybrid or not. In fact, most Honda dealerships have a second sticker on just about every model. One has a $2K markup on every car in the lot.
The one undeniable truth about buying a new car is that no matter what deal you get, someone, somewhere will get a better one. In the end if you're happy with the car, the price you pay is a good one. I paid MSRP for my 03 HCH, and have no regrets. Lots of folks paid MSRP for their 06 - many paid less. All depends on how heroic you want to be.
On supply and demand and intentionally limiting production to drive the price up, I honestly don't believe in it. How many people at this site started out to buy a Prius and went to a Civic because of the wait? Bet there are folks that did the reverse as well. If a car is not available, you risk loosing a sale. What I think they try to do is estimate the demand and produce to it as close as they can. Given that's far from an exact science, what looks like intentionally limiting production is more likely an underestimate of the market on their part.
The one undeniable truth about buying a new car is that no matter what deal you get, someone, somewhere will get a better one. In the end if you're happy with the car, the price you pay is a good one. I paid MSRP for my 03 HCH, and have no regrets. Lots of folks paid MSRP for their 06 - many paid less. All depends on how heroic you want to be.
On supply and demand and intentionally limiting production to drive the price up, I honestly don't believe in it. How many people at this site started out to buy a Prius and went to a Civic because of the wait? Bet there are folks that did the reverse as well. If a car is not available, you risk loosing a sale. What I think they try to do is estimate the demand and produce to it as close as they can. Given that's far from an exact science, what looks like intentionally limiting production is more likely an underestimate of the market on their part.
Last edited by Tim; 05-01-2006 at 07:04 AM.
#28
05-01-2006, 07:25 AM
Re: Seems Like a Ripoff
Well, it's hard to predict how popular something's going to be when you design it. Look at the Accord Hybrid. I'm sure Honda didn't want to start out at a huge capacity and risk having something that didn't sell or had a huge bug in it.
I think the only reason we're shocked at paying full MSRP (which I did) is that we're so accustomed to American manufacturers offering huge incentives to sell their cars. Frankly, I was happy to not have to pay more than MSRP.
A couple of Toyota dealers in the area said they were making $2K on top of MSRP and still had a several-week waiting list. (I think it was a stunt so they could say "hey, we can get you one in a week for $2K over MSRP" and expect us to pay it gladly.)
I think the only reason we're shocked at paying full MSRP (which I did) is that we're so accustomed to American manufacturers offering huge incentives to sell their cars. Frankly, I was happy to not have to pay more than MSRP.
A couple of Toyota dealers in the area said they were making $2K on top of MSRP and still had a several-week waiting list. (I think it was a stunt so they could say "hey, we can get you one in a week for $2K over MSRP" and expect us to pay it gladly.)
#29
05-01-2006, 12:48 PM
Re: Seems Like a Ripoff
Originally Posted by wstiefer
I believe the posts in this thread have missed one important piece of data: The federal income tax credit offered for buying an HCHII is only good for the first 60,000 units produced. What does this mean? Starting with HCHII #60,001 and beyond, the buyer will not receive a tax credit on his/her federal income tax return.
Producing at equilibrium....NOT HARDLY! Quantity demanded is SO far above quantity supplied...hence Honda has created a shortage of HCHII's as I described above.
!
Producing at equilibrium....NOT HARDLY! Quantity demanded is SO far above quantity supplied...hence Honda has created a shortage of HCHII's as I described above.
!
2. Also, your logic does not support your conclusion on the " Hence..line." New models and new technology often arent instantly produced in mass quantities.
#30
05-01-2006, 02:31 PM
Re: Seems Like a Ripoff
Originally Posted by rysa4
1. After 60,000, the tax credit does not disappear, so that is an incorrect statement. The credit lessnes under current legislation after 60,000, but does NOT go to zero on 60,001.
2. Also, your logic does not support your conclusion on the " Hence..line." New models and new technology often arent instantly produced in mass quantities.
2. Also, your logic does not support your conclusion on the " Hence..line." New models and new technology often arent instantly produced in mass quantities.
http://www.hybridcars.com/tax-deductions-credits.html
RE: #2..."my logic doesn't support....", you are saying the exact same thing as am I. By producing a small number of HCHII's, Honda is (whether they mean to or not....and again my opinion is they absolutely mean to do this!) creating a shortage of HCHII's in the marketplace, thus keeping high pricing pressures on the market and creating a situation where many dealers are unwilling to lower their prices (of course depends on the metropolitan area one is in when looking to buy).
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