Nissan Leads the Way in Auto Price Wars

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The 2014 Nissan Versa starts at a sticker price of $12,780, giving it the title of cheapest new car in the U.S. for three straight years. The automaker boasts the lowest-price electric car in the U.S. as well, after dropping the base price of a Nissan Leaf by $6,400 earlier this year. Look for plummeting MSRPs on seven other Nissan models very soon too.

According to the Associated Press, the sticker prices on seven of the 18 models sold by Nissan in the U.S. will be marked down indefinitely. The Nissan Altima will see a $580 cut, for example, while the price of an Armada SUV will drop $4,400, or nearly 11%.

Despite Nissan’s bragging rights regarding the Versa’s Cheapest Car crown, and despite dropping sticker prices on several new models, the automaker is not exactly known as the rock-bottom Walmart of the car industry. In fact, it is decreasing prices because they have been out of line with the competition. More than four out of five consumers do online research before buying a car, and Nissan had discovered that some of its vehicles weren’t turning up in searches due to higher price points. By scaling back the sticker prices, Nissan will immediately get more of its cars on the radar of online shoppers.

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None of this actually means that Nissan dealerships will be selling cars for less money. The AP noted that the automaker “plans to reduce rebates and other discounts to offset some of the price cuts.” So the changes might prove to be a wash for consumers—who could wind up paying the same as they would have before the price decrease, once incentives and negotiations are factored in.

For that matter, like other models known for cheap sticker prices, the typical Nissan Versa orobably isn’t as inexpensive as you’d think. USA Today reported recently on the fact that the base model—a stick shift—represents a very tiny percentage of all Versas sold. A buyer electing for a Versa with a fuel-efficient automatic transition is looking at a sticker price over $14,500, and the average Versa selling price is, in fact, over $16,000.

As Car and Driver put it, once you factor in the Versa’s realistically higher selling price, and the fact that it underwhelms most drivers, “there remains little to recommend the Versa over any other competitor—the Honda Fit, Ford Fiesta, and Chevy Sonic are all good small cars—or even a used car with a year or two of depreciation under its belt.”

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The Versa aside, now that Nissan is cutting sticker prices, competitors may follow suit in the months ahead, potentially making it a great time for buyers. “We could be looking at a price war,” LMC Automotive’s Jeff Schuster told the AP. This is especially likely seeing as the Japanese yen has been weak, making cars and auto parts manufactured there less expensive compared to the U.S. “If the yen stays where it is at and competitive pressure does as well, we could be looking at a more widespread battle for buyers.”