Selling "Regular" cars amid the hybrid Craze

by Victoria Fierson

Boy, that Prius looks nice. You are standing in your local Toyota dealership looking over a dark blue model, practically salivating at the thought of going 571 miles between tank refills. “Sorry, sir, that’s the last one we have,” the dealer says. “And it’s already sold.”

What a dealer does next is equal parts art, sales and math. In today’s market, keeping customers when their preferred fuel-efficient model has sold out is as critical as ever. There are only so many car sales to go around.

Consider the methodology of Brady Henderson, financial director for Pederson Toyota located in Fort Collins Colo. “The real question is, do you drive enough to make up the difference in pricing on the more expensive model?” asks Henderson. “Hybrid models are more fuel efficient when driving short distances within cities and towns. On the highway the car switches from electric to fuel emission. Whether or not it is a more cost efficient alternative mainly depends on the type of driver.”

It works — sometimes.

“Our job is to educate and guide the customer,” Henderson says. “There are many instances where a customer is misinformed about the true savings they will receive from hybrids. But if people want a Prius when they walk into a dealership, they are usually willing to wait for it.”

Tony DePaula, president of DePaula Chevrolet in Albany, N.Y., says the dealer should discuss the economics of a proposed purchase with any consumer leaning heavily toward a hybrid.

“When people are asking about alternative-fuel vehicles, give them an opportunity to do the math, DePaula says. “Often people think they are saving a lot more money than they really are. Customers need to assess what the true return is on their investment. This is based on the amount of miles they drive and the length of period they will have the car. Whether or not a hybrid will be more efficient and cost-efficient is based on a case-by-case basis.”

Take the Prius and the Corolla. There is about a $6,000 difference between the two, says Tim Curley, finance manager at Glens Falls Toyota in New York. For a customer who drives more on highways, the Corolla gets 36 miles per gallon, where the Prius gets 45 to 50. “While there is only an eight-miles- per-gallon difference, the amount of money a consumer will save on gas may not make up the $6,000 price difference,” Curley says.

Curley says initially people often decide to switch to a more fuel efficient vehicle out of panic. What the consumers don’t realize is that “it may take longer than the length of the lease to make up for the cost of the vehicle in relation to the amount of money saved on fuel,” he says.

That’s fine for consumers who buy based on price. What about the consumers who seek out the often-sold-out hybrid models for other reasons, what one dealer called “emotional” reasons? This is a tough situation for a dealer.

“It is a dealer’s responsibility to present all of the options to the customer to find the car that best suits them,” says Louise Miconi, financial manager of Hyannis Toyota in Hyannis, Mass. “Vehicles are an emotional purchase. People have their minds set on something, even when they are told other options are better. Especially when it comes to the hybrids, they are more concerned about being kind to the environment.”

For some nameplates, alternatives to hybrids are selling well, even in today’s credit-challenged economic environment. For example, non-hybrid Hondas are still strong sellers, such as regular Civics, Accords and CRVs. “They get really good gas mileage to begin with,” says Greg Conner, financial director of Prime Honda in Newton Corner, Mass. “Anyone who wants the hybrid version is interested in being environmentally conscious and is not as interested in fuel economy.”

It’s hard to talk someone out of that.

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