It might seem a no-brainer that a list of the most overpriced vehicles would include the $1,990,000 Bugatti Veyron. Or perhaps even a $443,000 Rolls-Royce Drophead Coupe? But it doesn't. Truth is, they're not exactly the sorts of vehicles buyers would ever call overpriced, because that's part of the allure. To most of the people who buy these vehicles, they're worth every dollar in image and exclusivity.
Of course the market can be fickle, and a higher price and a luxury badge doesn't always assure success. For instance, while demand has been surprisingly strong for the ungainly BMW X6 -- not quite a swoopy fastback sedan, not quite an SUV -- the similarly conceived Acura ZDX has languished on lots and even with substantial discounts isn't selling well. The ZDX made our list of most overpriced vehicles.
Being overpriced isn't just the province of expensive cars. For many months, Chevrolet has had to sweeten its Aveo subcompact (base MSRP: $11,965) with incentives just to keep them moving off lots quickly enough. Currently, the Aveo gets $2,500 in factory incentives, while one comparably sized rival model, the $14,900 Honda Fit, remains a strong-seller and hasn't needed incentives at all. So the Aveo is at once one of the cheapest cars on the market and simply overpriced.
But before we get to the rest of our list, let's examine how vehicles come to be overpriced.It's A Matter Of Supply And Demand
Without making this overly complicated, pricing for cars is based in part around supply and demand, just like every other consumer product. If a car sits on the dealership lot, depreciates rapidly after the sale, or offers a questionable value for the money, it might be overpriced. Properly priced cars need fewer incentives, fewer discounts, and display less price fluctuation.
So what causes demand to drop? Lots of things. For example, the construction industry has collapsed in the U.S., and this has taken a significant chunk of the full-size pickup market with it. As SUVs have become less popular and less fashionable, automakers have cut models and increased features while holding the line on pricing. Even so, full-size SUV's are still priced higher than what people are willing to pay.
"These are in some respects the true overpriced vehicles," said George Magliano, director of automotive research for IHS Global Insight.
The weak economy has been creating considerable uncertainty among buyers, with a resultant effect on auto sales. A lot of it has to do with consumer confidence, said Jack Nerad, executive editorial director for Kelley Blue Book. There's a lot of worry around payments, he explained. "People are asking, 'Should I be taking on a big new piece of debt right now?'"
Jeff Bartlett, deputy editor, online, at Consumer Reports said that incentives up to $1,000 have become expected in today's market, and they won't adversely affect value in the long run. But with many of the domestic full-size truck models, incentives have become such a significant part of pricing strategy that their used values take a much steeper plunge than just a few years ago. And that creates downsides in leasing, so manufacturers end up having to artificially boost values with captive finance companies.
"I don't think a lot of automakers can keep going for much longer" with this level of incentives, said Nerad, and while it's kept cars moving off dealer lots, it wears on automakers' bottom lines.
Considering the welfare state the auto industry has become recently, prices can't move much lower for many companies. Automakers could pull back on incentives and make supply even tighter if they wanted to, said Magliano, who predicted that incentives will be expanded even more this year. "This is an ingrained marketing tool, and the customer has become used to these things, to not paying sticker. But this is not the time to wean the consumer off incentives," he said.Strategies To Add Value
Instead of lowering prices, Bartlett suggested that a less expensive entry trim level could get people in the door. Another strategy would be to ratchet up standard equipment, such as safety features. Bartlett said that successful cars will address elements that matter to car shoppers -- and increasingly that's including connectivity features such as iPod and Bluetooth interfaces, as well as an impressive roster of safety equipment. It used to be buyers primarily wanted performance, style, and creature comforts. Now there's a shift from indulgent to pragmatic, with an emphasis on fuel economy, safety, quality, reliability, and pricing.
"Based on surveys in recent months, value is playing a very prominent role. Shoppers are looking more closely at what they get for the money," Bartlett said.
Which brings us to our list. These are vehicles that by our objective analysis have suggested retail prices that are just too high. This means that if you're interested in any of these models, you should not even think about paying sticker price.
In order to compile the list, we looked at market pricing figures from Vincentric, an automotive data analysis firm, to calculate how much each vehicle is being discounted from MSRP, then we looked at days in inventory for sustained high inventories -- a sign that vehicles are sitting unsold, with low demand. Finally, we consulted Automotive Lease Guide's Depreciation Ratings. ALG takes into account many factors pertaining to the brand and the vehicle to help estimate what it might be worth at trade-in time. So, for instance, a vehicle that doesn't hold its value well might be overpriced. Throughout this process, we avoided models that are being discontinued or are being replaced.Here Are Our Picks Of Ten Of The Most Overpriced Vehicles: