I don’t know what the dealers know, but I suspect it’s because their MSRP is cost plus a fixed percentage.

As the vehicle price increases, so too does the MSRP by a factor of that percentage.

I don’t think anything nefarious is going on.

 

If so, it would have to be based on a hidden cost factor, some sort of extra rebate. If you apply a similar percentage to the hybrid system invoice cost as you do to everything else, the hybrid would go for more than $800 over the non hybrid. In fact, you don't have to add any percentage, Just add the invoice cost of the hybrid system to a hybrid Limited and it will go for $926 more than a non hybrid. That's my point.

Of course there is some thing nefarious going on. I just don't know what it is.:smile

 

Same reason a Cadillac costs more than a Chevy when many models are the exact same car.m A Lincoln costs more than a Ford. Same vehicle. Pontiacs and Oldsmobiles used to cost more than a Chevy, less than a Caddy.
Back when the Pontiac Vibe was made at a shared GM/Toyota plant in California, it was not priced the same as a Toyota Matrix, which the Vibe was.
They're gonna get you coming and going.

There's an old joke something like: I used to spend my money on foolish things like rent and food. Now I've gotten smarter and I spend it on women and booze. Add CARS to that list and you will be a happy soul.

 

Same reason a Cadillac costs more than a Chevy when many models are the exact same car

I get that. Of course a hybrid costs more than a non hybrid.

My point is that Toyota is trying to have it both ways. It was welcomed by many, including me, when Toyota announced pricing on the 2019 Rav4 hybrid as $800 above the non hybrid. But the real cost difference to dealers is more than $800 so it will be difficult to get a hybrid for $800 more than what dealers will sell a non hybrid for.

 

Without knowing more than just msrp and invoice (which we never will) there is no way to know what kind of profit a dealer has in any given car. It's a fruitless exercise. Decide on the car you want, do your due diligence to determine the best price available to you and either be happy with your purchase or decide to chose another car.

 

This is not an unknowable figure. Dealers talk.

The point is that there may be pricing factors besides supply and demand and the "$800 premium" the Toyota keeps talking about


Interesting thread and kudos to the OP for bringing this up.

 

The above poster nailed it.

You can get as mad as you want about how Toyota arrives at the price you’ll have to pay, but at the end of the day nobody is forcing you to pay it. If NOBODY is willing to pay it, they’re going to more open to negotiation or incentives, but they can’t even get these hybrids to sit on the lot they’re so in demand.

 

This local area dealer has $1500-$1600 discounts on the 3 HVs they have in stock.

https://www.royalmooretoyota.com/al...ependencies=model:make,city:province,city:state&suppressAllConditions=compliant

 

This local area dealer has $1500-$1600 discounts on the 3 HVs they have in stock.

https://www.royalmooretoyota.com/all-inventory/index.htm?listingConfigId=auto-new,auto-used&compositeType=new&year=2019&make=Toyota&model=RAV4+Hybrid&start=0&sort=&facetbrowse=true&quick=true&searchLinkText=SEARCH&showInvTotals=false&showRadius=false&showReset=false&showSubmit=true&facetbrowseGridUnit=BLANK&showSelections=true&dependencies=model:make,cityrovince,city:state&suppressAllConditions=compliant

Yes Royal Moore is where I purchased. They honored the True Car Buying and also Costco!

 

I'm happy that I am not in the market for a new Toyota RAV4 Hybrid - the lowest noted price at Royal Motor Toyota.com is about $3000 more than I paid for my then-new '11 RAV4 Base V6 AWD with Upgrade Value Package, dealer installed Toyota tow hitch wiring, body side moldings and mud guards. And it appears that at least some Toyota dealers are charging gouging prices for all '19s.

 

My local dealers in the LA/OC California area are marking up the Hybrid XSE models by $15,000 ?‍♂ Don't believe me? Just look at the recent Google review photos from Toyota of Whittier, it shows the 15K "market adjustment" price.

 

Just yesterday Patrick from Toyota of Huntington Beach said I was "shopping for the wrong vehicle" since I refused to pay the $15K mark-up. Lame.

 

No, the dealers are taking advantage of supply and demand.

Even on the right coast, dealers management has raised the price salespersons can offer on hybrids by $500 since I bought mine for ~$3k under MSRP. OTOH, I'll bet you can get a great deal on an ICE version. The reviews shifted people who would normally buy ICE.

You could pay for a one way flight and the gas to go cross country if you shopped on the right coast.

 

No, the dealers are taking advantage of supply and demand.

Even on the right coast, dealers management has raised the price salespersons can offer on hybrids by $500 since I bought mine for ~$3k under MSRP. OTOH, I'll bet you can get a great deal on an ICE version. The reviews shifted people who would normally buy ICE.

You could pay for a one way flight and the gas to go cross country if you shopped on the right coast.

What do you call the other coast?

 

It seems simpler to me than juggling invoices and holdback and etc. The vehicle belongs to Toyota and the dealer before I buy it. They can ask $1 million for it if they want and it would not be one bit immoral. I can choose to buy it or not. No one is forcing me to do anything, and they certainly do not “owe” me anything. They built the vehicle, paid for the raw materials, billions of dollars worth of factories and hundreds of thousands of employees - they took all the risk of whether it sells or not profitably. I have many other choices. So from that standpoint, “deceptive” simply does not enter into it. I have complete freedom of choice and many others to choose from. I am frankly grateful that others have risked $billions so that I have the wide selection of transportation choices that I have, from Toyota to GM to Subaru to Tesla.

 

Having worked for large corporations, I can tell you that these prices are arrived at by groups of smart people using a lot of data, information, history and, yes, psychology. There’s a lot more we don’t know than dealer margins. Yes, I’m sure you and everyone else here realizes this.

I don’t consider any of it deceptive. It’s just business. I toured a Kenworth factory once and the tour guide said that margins on options are a lot higher than margins on the base vehicle. The thinking was that people who buy the options can afford it. I’m guessing that’s common industry practice. I’m also guessing that many people think it’s nefarious. I don’t.

Now I do frown on a dealer marking up $15k based on what appears to be a temporary shortage. My dealer is not doing this.

I was just thinking yesterday how amazing it is that we have such technology and choice available to us. That Toyota can make such a vehicle as the RAV4 Hybrid and sell it for the price they do blows my mind.

Negotiation is not my thing. I envy you all who can put so much thought into it and come out with a great deal.

 

Keep in mind that the dealer assumes risk and cost when he accepts the car onto his inventory. So he has an incentive to move it to the sold category to eliminate the cost of maintaining that car in his inventory. He balances that against profit (or loss) and long term customer relationship value. Is the total deal he has to make the sale profitable taking into account any financing, trade in expected profit, hidden dealer incentives, etc.

There is an interesting article in the Raleigh News and Observed today how new car and truck inventory count is being deliberately drawn down by significant amounts because of a slowdown in sales. Dealers are reacting logically.

Prices have risen (my last new car purchase 8 years ago was ~50% less than this one) and incomes haven't as much except for a fortunate few. Leases have been longer. Cars are better, last longer. Despite the advances in MPG, electronics, safety, etc many have no compelling reason to buy now. Add in layoff headlines and the zephyrs of a coming recession and people may choose to keep their powder dry. Add in the change in car buyers preferences and dealers are stuck with all the sedans nobody wants. The dealer cited still had new 2017s on his lot. Even truck sales are slowing, some truck factories are on rolling layoffs. Discounts rise as demand falls.

A dealer has to do what he can to make money. I don't begrudge them trying. And if their inventory (or allocation), price and service matches my wants, needs and information, I buy then and there. But armed with information from here and other web sites and cash, I have flexibility to compare prices and service (including promised delivery time) and to make the deal which best fits my needs.

Would I have paid MSRP for my Rav4h? No. I could have easily waited.

My dealer raised the price of the car I bought that the saleman could offer by $500 in the week I bought my car. The dealer honored the email price we had agreed on. The next buyer of the same car would have paid more...supply and demand.

Sometimes they can win, but I don't have to choose to play when the table is tilted in that direction. I only buy when I can win. And sometimes I have to go somewhere else to get a compelling deal. I did.

Go price a Toyota Supra or a C8 'vette and see if you can get list price.

 

How do you know you have accurate invoice pricing?

It has been proven dealers pay for truecar, Costco etc... so their "good" deal prices are a total sham.

They are very good at getting you to think there is a certain invoice price but you really have no way of knowing how accurate that is

 

All I care about is the difference between MSRP and what I pay ... well that and any fees the dealer or state adds. I factor in what I hear others are paying.

I use https://www.car-buying-strategies.com/dealer-invoice/toyota-rav4-prices.html as a general guide. I make sure the dealer knows I know about things like "holdback" and invoice and what dealers in other distributor areas price cars at. In 2011, dealers could advertise their prices, now Toyota restricts them to advertising MSRP. But an email can get a price. Only took me one and it was enough different from MSRP and the expected delivery was soon enough that it was good enough. Did I compute to the $1? Heck no. It was an emotional decision that it was so much better than my local dealer that I had no hesitation.