Automobile Prices

In tough times, Nissan Motor Co. is hoping less is more. On Friday, the Japanese carmaker said it would begin selling a cut-rate version of its Versa sedan in the U.S. for $9,990 -- more than $1,000 less than the cheapest new car currently sold in America. The frills-free Versa -- which is made in Mexico and will be available starting Nov. 18 -- will come without power windows or air conditioning and will be the only new car available in the U.S. for less than $10,000.

Tough times for automakers make this a great time for car buyers. Manufacturers and dealers have had to slash prices more than they have in decades -- and the bargains should soon be even sweeter as sellers push to move inventory before the end of the year. "All the planets are aligned in your favor," said W. James Bragg, who runs the car buying information service FightingChance.com. It's the best time to buy a new car, Bragg said, in 15 years.

After a decade of losing ground to foreign car makers and domestic rivals in the all-important California car market, General Motors appears finally to have launched an effective counterattack. Thanks partly to an innovative--though not universally acclaimed--sales strategy called value pricing, GM has boosted its long-sagging California sales across its seven divisions by 20% during the 1994 model year, GM said.

In tough times, Nissan Motor Co. is hoping less is more. On Friday, the Japanese carmaker said it would begin selling a cut-rate version of its Versa sedan in the U.S. for $9,990 -- more than $1,000 less than the cheapest new car currently sold in America. The frills-free Versa -- which is made in Mexico and will be available starting Nov. 18 -- will come without power windows or air conditioning and will be the only new car available in the U.S. for less than $10,000.

Automobile prices are a national disgrace. They have become a major burden to the citizen. The majority of people will not buy at these ridiculous prices unless forced into the market. This point is flagrantly obvious when the only time buyers appear at the showrooms is when large incentives are offered. Even with factory and dealer discounts, prices remain way out of line, taking an excessive share of the consumer's income. SHERMAN E. ROSS Los Angeles

Car dealers may refuse to sell vehicles at an advertised price if an honest mistake was made in the advertisement, the California Supreme Court decided Monday. In a 4-2 decision, the state high court overturned a Court of Appeal ruling that said an Orange County dealer should have sold a two-year-old Jaguar for $25,995--more than 30% less than its actual price--because of a newspaper's error in proofreading the dealer's advertisement.

Brian Donovan was hunting through the newspaper advertisements, looking for a 20th anniversary present for his wife. He was determined to find a 1995 Jaguar XJ6 Vanden Plas, preferably sapphire blue. And there it was in a Lexus of Westminster ad. At $25,995, it seemed like a great deal. Donovan and his wife zipped over to the dealership to make sure it was not a junker. After test driving the vehicle, Donovan told the salesperson that he'd buy it--at the advertised price. No dickering.

Detroit, which brings experimental "concept cars" every year to the Los Angeles Auto Show, is bringing another kind of experiment to the San Fernando Valley. This time it's a marketing concept that is drawing attention and, one auto maker hopes, more buyers. Driven by the need to raise its comparatively meager share of the Valley auto market, General Motors Corp. has been buying up dealerships and trying different approaches, such as no-haggle pricing.

Skeets Dunn, a San Diego municipal bonds dealer, has invested in a transportation commodity usually tied to instant depreciation and limited futures. He bought a new car. Without a factory cash back. He also waited three years and paid $400,000 for a two-seater that comes without carpets, spare tire, radio or safe hands willing to insure it. This car does 12 miles per gallon in city traffic and 200 m.p.h. wherever there is that much room to run.

In an unprecedented move, Cadillac has apologized to archrival Lincoln for fudging December sales numbers to maintain its coveted crown as the best-selling luxury brand for 1998. Historic segment leader Cadillac, skillfully zigging its way around the "L" word, said Wednesday that an internal audit showed that it "overstated" December sales by 4,773 vehicles. Initially, Cadillac had claimed the sales title by a scant 222 vehicles.

When it comes to buying a crash-worthy convertible, paying more doesn't always get you more, researchers have found. With starting prices above $39,000, the BMW 3 Series and the Audi A4 Cabriolet were among the most expensive of 10 ragtops tested by the Insurance Institute for Highway Safety, yet they placed near the bottom of the safety rankings.

When Les Kelley published his first modest "blue book" of car prices in 1926, it featured information on Hupmobiles, Duesenbergs and a 1921 Nash that was going for $50. Times change. Kelley Blue Book is now a 330-person operation providing car shoppers with online access to reams of performance and pricing information on gas-electric hybrids, crossover utility vehicles and other four-wheeled creations not dreamed of back in the Roaring '20s.

Toyota Motor Corp., banking on its reputation for quality and high resale values, is pricing its redesigned full-size 2007 Tundra pickup trucks $1,000 or more above most competitors. Although some analysts see the step as potentially dangerous at a time the pickup market is softening, Toyota justifies the pricing it announced Wednesday as an effort to "accurately price according to the value of the vehicle," said Denise Morrissey, a spokeswoman for Toyota's Torrance-based U.S. sales unit.

Nearly four of 10 consumers who traded in for a new car last year owed more on their trade-in than it was worth, says industry researcher J.D. Power and Associates. The auto industry calls this "negative equity" or being "upside down." And the number is up from 25% in 2001. Half the buyers younger than 40, and 56% of Gen Y, are upside down, Power says. Gen Y, the oldest of whom are 28, also tends to have the longest car loans -- 65 months versus the industry average of 62.

On the Internet, car shoppers can gather information available from dealers but without the pressure of eyeball-to-eyeball negotiations. But Web browsers should beware. The same basic rule that applied pre-Internet is still valid: Don't assume one source of information has all the right answers. Whether looking for new-car prices, trade-in values or loan interest rates, check multiple sources and be prepared for different responses to the same question.

Ford Motor Co. said it would miss its goal of keeping vehicle prices steady this year in the United States because of escalating incentives. The change in Ford's outlook came during an analysts' update on Ford's year-old turnaround plan, which Chairman and Chief Executive William Clay Ford Jr. pledged was on track, including Ford's target of earning 70 cents a share for 2003.

A customer at Kramer Mazda in Santa Monica offered the $25,000 in the briefcase he was carrying to buy a new Mazda MX-5 Miata sports car. It was too much--$11,200 more than the price of a stripped-down version of the two-seater convertible and about $7,000 more than a fully loaded version. "I told him we have set a price, we had a list of names and we'd be happy to put him on the list for when the cars come in," said John Lyon, sales manager at Kramer Mazda.

Toyota Motor Corp. set the suggested retail price for its five-passenger Prius hybrid sedan at $19,995, making it competitive with Honda's smaller two-seat hybrid, the Insight. Executives at Torrance-based Toyota Motor Sales USA Inc. said Toyota dealers in the U.S. will start taking orders for the 50-miles-per-gallon sedan in June. Deliveries are to begin in August. The single-price Prius uses a small gasoline engine augmented by an electric motor for propulsion.

Toyota Motor Sales USA Inc. announced that it was raising the price of most of its 2003 Toyota-brand models by an average of $72 per vehicle. Toyota said the increase was routine and wasn't related to incentives, which much of the automotive industry has relied upon over the last 18 months to boost sales. The average manufacturer's suggested retail price increase is 0.3%, the company said. Prices won't change for the 2003 Corolla, Matrix, Prius and 4Runner as well as the 2004 Sienna.

Oldsmobile has whittled the number of models it offers as well as the number of dealers in preparation for closing its doors and leaving the automotive scene in the 2004 calendar year. But that hasn't stopped the General Motors division from raising prices on what it has left. "We are not selling distressed merchandise," said Olds spokesman Gus Buenz. "When GM decides to raise prices across the board, we're included until we shut our doors."