Gimme Options: Consumers Get Small Cars With Expensive Extras

BMW's Mini Cooper starts at just over $18,000, and the vehicle is highly popular, in part due to high gas prices. Yet customers pay an average of 40% more than that base sticker price to get the car loaded with options. It doesn’t take a Mathlete to tell you it's going to be awhile before the fuel savings negate the extra $7,000 they're spending.

If you really go heavy on the extras, a Mini Cooper can hit $40,000.

This is a small bit of good news for automakers in otherwise dismal times. The reason car companies stuck with big gas-guzzlers for so long is because the profit margin on these behemoths is far greater than it is on small cars — as much as $10,000 for large trucks and SUVs.

On cars with smaller profit margins, added options are one of the few ways dealers can turn larger profits. After all, $400 for a navigation system, $600 for a sunroof, $500 for satellite radio — those options really start to add up.

It seems as if car buyers have grown accustomed to the perks of a big car and want to take those benefits with them when they downgrade to smaller vehicles.

Car Buyers Downsize, but Spend Big on Options (The New York Times)

Comments

This has been going on as long as there have been car salesmen. But the gulf has widened over the past few years with the overpriced GPS and the number of optional airbags and such.

I remember as a kid the $1499 VW bug or the $1995 Maverick.

I still can remember Mr. Iacoca on TV talking about the $4995 K-car. Remember the $2995 Yugo or $3999 Hyundai?

Some vendors still pull this so watch out. They never have them and you would never want one usless you didn't want a radio or air conditioning or in a color other than white. The factory will not let you order one with A/C and dealer labor would be more than the savings to install one.

Good luck finding any car in base trim from any of the others, the dealers don't stock them because there is so much mark up on the options. The few that I have seen had all the options ala-cart of the next trim level added in and it was more than the base price of the next trim level. I have not seen a new GM car in trim level one on any lot for over 10 years. I guess the rental car and fleet buyers grab them.

If you are lucky enough to find a dealer that will order one for you they will charge you sticker plus a fee and try and sell you dealer installed options.

The car is a appliance that gets you from a-to-b and a very poor investment and the costs to build increase every year. Most of this stuff that is added is exempt from the warranty and doesn't last the loan. How often and how hard is it to roll down a window. Why do I have to get on-star and GPS to get air conditioning?

Phooey

Wake up or someone else is going to get your market that you built your car company on in the first place.

This has been going on as long as there have been car salesmen. But the gulf has widened over the past few years with the overpriced GPS and the number of optional airbags and such.

I remember as a kid the $1499 VW bug or the $1995 Maverick.

I still can remember Mr. Iacoca on TV talking about the $4995 K-car. Remember the $2995 Yugo or $3999 Hyundai?

Some vendors still pull this so watch out. They never have them and you would never want one usless you didn't want a radio or air conditioning or in a color other than white. The factory will not let you order one with A/C and dealer labor would be more than the savings to install one.

Good luck finding any car in base trim from any of the others, the dealers don't stock them because there is so much mark up on the options. The few that I have seen had all the options ala-cart of the next trim level added in and it was more than the base price of the next trim level. I have not seen a new GM car in trim level one on any lot for over 10 years. I guess the rental car and fleet buyers grab them.

If you are lucky enough to find a dealer that will order one for you they will charge you sticker plus a fee and try and sell you dealer installed options.

The car is a appliance that gets you from a-to-b and a very poor investment and the costs to build increase every year. Most of this stuff that is added is exempt from the warranty and doesn't last the loan. How often and how hard is it to roll down a window. Why do I have to get on-star and GPS to get air conditioning?

Phooey

Wake up or someone else is going to get your market that you built your car company on in the first place.

once again the problem with the people in this nation, is choice. we have too many choices available to us. i'm in a high enough tax bracket where i could afford a car with leather seats and navigation, but i dont. i dont care about or need that stuff. my car gets me from point A to B.

Faced with a sputtering economy, falling house prices, much tighter credit and higher interest rates, Americans still come up with ways to throw away money on useless doodads.

How did anybody ever manage to get from here to there without satnav? How did we manage to unlock cars before electric locks? There are only about 15 billion regular radio stations, but that's not enough. We have to pay 200 bucks for satellite radio PLUS a monthly subscription to listen to the thing.

Then, after figuring out throw away 25 grand on a Corolla, after buying a 65 inch flat screen TV on the Visa card at 30% interest, they'll complain that the can't afford health insurance.

at the dealership i work at. We only have one BASE BASE BASE Jetta. and needless to say, its been there for like 4 months now, where all the other ones with options are moving like crazy.

Peppy: I bought a base Focus, with just automatic and ABS about 3 months ago. The dealer had 4 cars like that. He still has the other 3.

In asia, people only buy cars with high specification of features. In Taiwan and Vietnam, the domestic built Euro-Focus comes with plenty of wood trim and leather and starts at around $33,000 USD. They sell like hot cakes. The mindset is that most of the population doesnt need a car and if theyre going to buy one, it better be VERY nice. They also keep them for at least 20 years. Saw tons of 80's Ford Telstar/Mazda 626 Japan and Taiwan with as little as 20,000 miles.

This may be a big window of opportunity for euro cars like VW to get a bigger marketshare with their "nicer" econoboxes like the Rabbit.

maxwell, people who go for Focuses more often wish to spend as little as possible; people who go for Jettas think they have taste and want some character. people who are willing to spend the extra few thousand will not settle for lack of features either.

since most people drive SUV's drive by themselves most of the time (to and from work, errands...), it's not hard to imagine that they'll realize that image is not worth the gas money and it's just as nice to drive a small car with leather and navigation and ALSO save some gas etc.

rather have toyota or gm get more money than see that money go to hugo chavez and iran so they can support terrorist.