Wednesday, February 20, 2008

SMART Car Price Premiums over MSRP

During one of my recent trips to Europe, I was struck by the large number of super small cars driving around their cities. From Paris to Prague to Rome - the streets were littered with these tiny little cars. For the overly congested European cities where space is at a premium, these tiny cars make alot of sense. Just about every automaker had a small version car - the Mercedes A Class, the variations of Fiats and Renaults - the list goes on. However, the one car that stood out was the Smart. The Smart was the most popular of these cars and it was arguably the best looking. Whenever I saw a Smart parked, I couldn't help but peer inside to see what it was like. I always thought that it would be cool if they started selling Smarts in the US, but I always thought that these little things would never pass our strict safety regulations. That all changed late last year when Smart began taking $99 reservations for these USA versions. Certified to be street legal here, Smarts were finally coming to our shores.

Initially, the Smart Fortwo is offered in 3 versions: the Pure, the Passion and the Passion Cabriolet, with MSRPs of $11,590, $13,590 and $16,590 respectively. These MSRPs were a bit higher than I expected, since they are about 1/2 the size of a Honda Civic but at around the same cost.

With new car model offerings (which have a cult-like following), I wasn't surprised to see the first 2008 Smart Fortwos selling for well above the MSRP. According to the actual Smart Car prices on PriceHub, Smarts have been selling for quite a bit higher above MSRP:

SMART Pure: +38% over MSRP
SMART Passion: +39% above MSRP
SMART Passion Cabriolet: +33% above MSRP

While my back of the envelope calculations are not scientific by any stretch, they do illustrate the popularity of the Smart so far. I wouldn't be surprised to see these huge premiums over MSRP last for quite some time. After all, it took a few years for Toyota Prius prices to come back to Earth.

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7 comments:

Anonymous said...

Do you know if people on the waiting list are paying MSRP, or are the dealers free to charge more?

Anonymous said...

I really don't know exactly how SMART dealers are allocating the cars. Since the transactions on PriceHub are probably from the early adopters or the lucky few how *really* wanted the car, it makes sense to me that these prices reflect a hefty premium. Similar to the Prius, I bet the SMART will be expensive until supply matches demand.

Unknown said...

I Think the smart cars are a great alternative because besides being economic the new style drives me crazy. I like all the size, they are smaller, they are really nice. I usually looking for information about new thing and would like to share with you this site costa rica investment opportunities, this because you shared with me this wonderful information through this blog.

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