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Discussion Starter · #1 ·
I currently own a 2001 Camry CE. I’m shopping for a 2017 RAV4 XLE. In doing so, I’ve been doing a lot of price analysis.


A common theme across every dealership is “Dealer installed options” which typically come with (what I estimate to be) at least a 300% markup (though I wouldn’t be surprised if it was over 1000%). These dealer add-ons include but are not limited to
- Tinted windows
- Free nitrogen fill for the life of the vehicle
- Pinstriping


The 2017 Rav4 XLE comes with the following upgrades over the LE.
-Power Sun/Moonroof
-Integrated Fog lights
-Dual Zone Climate control
-Alloy wheels


There’s a few others but those are the big ones. Those items account for an MSRP difference of $1920. I don’t know for sure, but that sounds like at least 300% markup. The upshot is that I ignore those upgrades when pricing an XLE and treat it like I would an LE.


That’s the bells and whistles. Now let’s talk about the meat. The Rav4 has 2.5L 4 cylinder engine. A dealer confirmed, for me, that this is the same engine found in the Camry LE 4 cylinder model. It looks like the transmission is also the same and the brochure doesn’t list the Camry’s torque. The MSRP on a Camry LE in the Southeast is $23070 the MSRP on a Rav4 LE is $24910. It’s difficult to tell from the brochure and I test drove a 2016 Rav at the dealer but my understanding is that the Camry LE has more bells and whistles than the Rav4 LE.


Now, I understand that the dealer asking price isn’t solely determined by the vehicle’s production cost but I also think that under the right circumstances it might be possible to get a Rav4 for a low Camry price.


Feedback would be appreciated.
 

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On a 2016 you can probably get a good deal, but 2017? No way right now, especially since all 2017s have Toyota Sense-P standard. Big distinction from the 2016 models that dealerships are trying to dump.
 

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That is possibly the strangest rationalization for what a "fair" price for a vehicle should be.

There’s a few others but those are the big ones. Those items account for an MSRP difference of $1920. I don’t know for sure, but that sounds like at least 300% markup.
You are way off on the 300% figure. Toyota as a corporation runs on less than 10% profit margin. You are not buying a Rolce Royce. You are getting almost all of that $1920 in real improvements. The RAV4 is in a very competitive and low profit margin market. Maybe not as much as the Camry, but pretty close.
 

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Discussion Starter · #4 ·
That is possibly the strangest rationalization for what a "fair" price for a vehicle should be.


You are way off on the 300% figure. Toyota as a corporation runs on less than 10% profit margin. You are not buying a Rolce Royce. You are getting almost all of that $1920 in real improvements. The RAV4 is in a very competitive and low profit margin market. Maybe not as much as the Camry, but pretty close.

If you think my numbers and thinking are completely off base that’s fine you’re entitled to your opinion and I like a good discussion but I never used the word “fair” you’re the one who brought up fairness. I don’t think you’d appreciate it if I put words in your mouth so please extend me the same courtesy. The question, here, is about strategy not fairness. Having a better idea of what they’re paying gives me a better idea of what to offer.


Assuming, for the sake of discussion, that Toyota’s corporate profits are less than 10% I think it’s likely that the 10% is an average and that they make more than 10% on some things they sell and less than 10% on others. So, their corporate number doesn’t automatically negate my 300% number. The point is that higher margin/less expensive items (dealer installed options, Toyota accessories, and trim add-ons) are more likely to be negotiable than more expensive/lower margin items (like actual vehicles) but I also think that even the vehicles are more negotiable than the dealers would care to admit.
 

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Forget the dealer invoice sheet, get your hands/eyes on the dealer cost sheet if you can and go from there.

Good luck with that. ;-)
 

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You are overthinking this. There are so many websites to help you get a great price, or do it yourself with something like cargurus.com where they pit dealers against each other. Find the lowest price on the vehicle you want and just go buy the damn thing.


Sent from my iPhone using Tapatalk
 

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I just bought a 2017 RAV4 XLE FWD with the convenience package and roof rails (which I didn't need) 11/27/2016.

The car also had dealer installed deep window tinting (needed in Arizona) and clear door edge and handle protectors.

The convenience package includes Toyota's crappy navigation system which doesn't understand anything I say (even with voice recognition training), but includes some great safety features such as lane departure warning, blind spot monitoring and front and back collision...which I really like.

The car listed for $31,450 before tax and license and other crap. There's $1500 cash back applied during Toyotathon, and I weaseled them down to $26,722 before my trade in. The dealer said, oops...we gave you the tinted windows and door edge protection for free. Yeah, sure they did.

Mind you, this is a four cylinder FRONT wheel drive only. Don't need no stinking 4WD in Phoenix! LOL!
 
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