Small Cars Carry Big Price Tags

As public turns from SUVs, automakers jack up prices on compacts

By Katherine Thompson, Newser Staff

Posted Sep 3, 2008 10:57 AM CDT

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Small Cars Carry Big Price Tags — The Fit is the most popular model in the Honda lineup. Dealerships sell the small car "with the big insides" for much less than an SUV, but more than cars of its size have been going for. (AP Photo/J. Pat Carter)

With sales of SUVs and trucks dwindling, car companies have begun to push smaller, more fuel-efficient models—but not for the same small prices. Without the $10,000 profit that was typical on SUVs, automakers can no longer sell cars like the Ford Focus for an average profit of $100. Some are using extras to lure higher-spending customers.

"We'll see average transaction prices creep up to the mid-$20,000s in the next 4 years, from the high teens now," an analyst predicts. Next year's Focus will have leather, heated seats, and the new Chevy Cruze will come decked out as well. Increased demand is also driving higher prices, as are industry fuel-economy standards.
(More cars stories.)

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