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post #1 of 1 (permalink) Old 12-02-2018, 01:24 PM Thread Starter
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Purchase experience

The Prices Paid thread (can't post a link since I'm a new member) was incredibly helpful for determining a good price to start negotiations. Rather than burying all this in that thread, I hope it's OK to start a new thread with the long version of my experience buying a 2018 RAV4, in hopes that others will benefit.

1) In all of the posts in that thread, I found 39 where the user gave three key pieces of information: MSRP, the dealer discount or the 'before taxes/registration' price, and the factory rebate. Lumping in the rebate and the dealer discount doesn't help with figuring out what kind of discount I should be looking for. Just giving the out-the-door price isn't especially helpful at all.

2) The average dealer discount in those 39 posts was about $4000, or 14%! This is for all trim levels and all around the USA, for the whole year. There are no trends as to whether certain trim levels got more or less discount. I am willing to share the spreadsheet I put together with the info from that thread.

3) I looked at the inventory of all the dealers in the area for the model/color I was looking for. I found that several dealers had a Limited in my color with two options (all weather floor mats, which our ultimate salesman told us was the "Pacific Northwest" standard for what Toyota put on cars coming to the region) and the rear bumper applique. This gave me a good apples-to-apples comparison amongst the dealers. MSRP is $33918. Factory rebate is $3000. Invoice price is 31674 ($2244 less than MSRP, 6.6%). One dealer said invoice was $32,440.

4) The first dealer we visited offered us first just $979 (2.9%) off, then $1419 (4.2%) when we said we were walking away. He told us that the latter was better than the Costco price. Went home that night and did the research on the Prices Paid thread, and also requested the car through Costco. Costco sent us back to the same dealer.

5) CarsDirect dealer discount for that car is $1005 (3%). KBB high is $1054 (3.1%); fair is $2148 (6.3%); low is $3063 (9.0%).

6) Given that it is the end of the model year, I decided to open with asking for a dealer discount of $5000 (~15%) for starters. I told the dealers that I was paying cash and had no trade-in.

7) Via email, one dealer with two identical of this model would only offer $1778 (5.24%) off. I told him about the average $4000 discount I had seen on this forum and he said that "there is a lot of information out there on the internet".

8) Another dealer offered $2121 (6.26%) off for a slightly different set of options. This dealer is about 100 miles away but offers a benefit of a lower sales tax ($700+ savings) and a $50 lower delivery fee. She was a bit incredulous at the average discount of $4000 I found from this forum.

8) Another dealer, via email, offered me "over $2000" (6%). I countered with $5000, and he went straight to a $3452 (10.2%) discount ("I would love to keep this as simple as possible for both myself and you! I will strip the vehicle of all profit"). Given the offers I had so far, I was pretty happy with this. This dealer also offers a lifetime powertrain warranty.

9) Went back to the first dealer, told him the offer I had, and the best he could do was $2279 (6.72%). Also told me the Costco price for this vehicle was $32439. He was willing to not charge the usual $894 for their dealer add-ons of window etching, undercoat, and paint sealant and warned me about dealer add-ons at the place where I had the great deal. He said they would not be getting their new RAV4s until January, so they weren't pressured yet to move them as much as I thought. Somewhere else I heard that hybrids wouldn't be coming in til March or April.

10) Went in to the dealer with the great deal. That car had sold that morning. The reason they could give me such a better deal than other dealers is that they had had the car on the lot for over 70 days. Toyota starts dinging the dealer if the car is on the lot more than 45 days, and really makes it hurt after about 90 days. So dealers are especially motivated to sell cars that have been sitting around for a while.

11) They had a nearly identical vehicle (floor mats but no applique). Even though this vehicle had only been on the lot for only a couple of weeks, to their credit, the dealer offered me the same 10.2% discount. The salesman also admitted that my buying the car on the 28th of the month helped as they had to get their November quota, and maybe the other dealers had met theirs. I said no to the Permaplate and service contract. There was one dealer add-on that they would not negotiate on (Pulse brake lights, $299; $20 module on Amazon). I guess they have to get their profit somewhere.

12) When we started talking to the finance guy, he pushed some of the same dealer add-ons as the salesman plus several more. We kept saying no and he kept dropping the prices. We wound up deciding to buy their add-on of Permaplate at $230 (the cost of a detailing or two); the 5 year maintenance package at $755 (supposedly a bit more than the cost of the 30,000 and 45,000 mile services that I will get with the package, plus all the oil changes in between), and the wraparound comprehensive coverage at $1190. The 'wraparound' is in addition to the dealer's lifetime powertrain warranty and covers everything else, including all the electronics. My experience with my 2004 Prius and 2009 RAV4 is that the drivetrain is pretty bombproof. My experience with various home appliances is that the electronics are what goes bad, not their mechanics. All of these computers in the engine compartment plus all the new computers for the safety equipment, I could easily spend $1190 somewhere in the next 7 years.

I was prepared to negotiate the dealer discount with the salesman, but my experience with the finance guy was frustrating in that I was not prepared for bargaining for the things he offered, nor was I certain they were worth it. I don't buy cars often (still have the 2004 Prius with 100K miles and the 2009 RAV4 with 90K miles), I guess if I bought them more often I would be more used to the experience.

I believe I can still cancel the $1190 wraparound and the $755 maintenance package and would be happy to accept advice on that.

13) Bottom line: I did great on the dealer discount but perhaps folded too much on the dealer add-ons. MSRP $33849. Base price on my buyer's order: $30391 (dealer discount $3457, 10.2% off MSRP). Rebate $3000. Dealer add-ons: $2474. Taxes and fees: $4139 (yes, really, but we have no income tax in Washington). Out the door at $34005.

Also bottom line: go in at the end of the month and, if you aren't too picky, ask about vehicles that have been sitting on the lot for more than 40-45 days.

2009 RAV4 Base
2018 RAV4 Limited
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