A sign of things to come?
Not really. It’s called the car business. The same Southern California Nissan dealer that is offering the LEAF for $5,000 off of manufacturer suggested retail price (MSRP) is also offering most other Nissan models with several thousand dollar discounts currently.
This particular dealership was among the first to offer the LEAF at $1,000 off of MSRP when the vehicle first came out. Then $2,000. Then $3,000 in June of this year. Now $5,000. It’s called taking care of business. Nissan, like all other manufacturers, offers volume incentives and some dealers have high enough sales volume that they “lose” money on some (key word – some) new vehicles sold because they know that the manufacturer will cut them a check at the end of the quarter for achieving certain volume goals. The odds of getting a deal like this from most other dealerships is slim to none. Simple – they don’t sell the same overall number of units so they will not receive the additional volume incentive from corporate. By the way – these corporate incentives don’t show up on any third party website such as Edmunds.com or kbb.com. Consumers believe that with all of the various third party sites that they view, they have an understanding of the “true value” of the car. I’ve worked in the business for over twenty years and still have not been able to figure out the true value of the car. Bottom line – no consumer will ever pay more than they think a thing is worth and no provider will ever sell anything for less than they think it is worth. This truism applies to new (and used) cars, houses, and just about anything else that you can think of.
By the way – these cars are all top of the line SL trim levels and they are not for sale. You can only get that price if you lease the vehicle, and only if you lease it through Nissan financing. For many, this will work out fine. For others, they may have no interest in leasing the vehicle – they want to buy it outright. You would need to look at the terms of the lease to see what additional fees an early buyout might entail.
So does this price reduction signal the crumbling of the future of the electric vehicle (EV) market? I don’t think so. As with pretty much everything else that one cares to analyze – context matters.
(EDIT: As of August 13, 2012 this Southern California dealer has reduced their dealership price reduction from $5,000 to $2,500 off of MSRP.)