Toyota Dealers Begin To Soften Prices On Hot RAV4 Prime PHEV
Toyota RAV4 Prime owners are now posting up the prices at or below MSRP that they have paid for one of these hot new plug-in hybrid-electric vehicles. The reason this is news is that the prices had been above MSPR for most of a year.
The all-new Toyota RAV4 Prime debuted last year and fans went crazy. In the mad rush to buy a new RAV4 Prime plug-in hybrid, shoppers were quickly brought down to Earth by dealers who marked up the plug-in hybrid-electric vehicle above MSRP. What a buzz-kill!
Why is RAV4 Prime Priced Above MSRP?
The reason that dealers are able to charge above MSRP for this new family crossover is simply supply and demand. The demand for a new electric vehicle with 94 MPGe, outstanding performance, all-wheel drive, and a new low-maintenance design is very high. Like every automaker, Toyota is limited in what it can produce by battery supply constraints. Furthermore, Toyota is not shipping the RAV4 Prime to all states yet. Rather, the initial model year run of a bit more than 5,000 units went to just ZEV states (typical for all new EV launches). The expectation is that for the second model year, which is about to start soon, the coming 20,000 units will be spread out more evenly across the 50 states.
Why Are Dealers Able To Mark Up RAV4 Prime Prices?
Hot vehicles are often marked up above MSRP. Nearly every vehicle in America, including Tesla models, also comes with destination fees pushing prices above MSRP. What made this situation unusual is that the RAV4 Prime isn't a sports car, supercar, or super-low volume specialty model, but a family crossover. Of course, dealers routinely discount new vehicles below MSRP and buyers don't complain about that. According to TrueCar's latest data, Toyota's average incentive price reduction per vehicle is $2,363. However, shoppers feel it is insulting or unfair when they are asked to pay above MSRP.
Deals For RAV4 Prime Below MSRP
We won't reveal the names of any owners who purchased a RAV4 Prime below MSRP, but we will offer redacted comments they posted on one of the social media in fan clubs for the RAV4 Prime (there are numerous RAV4 Prime fan clubs with thousands of members).
Here are purchase price reports from some RAV4 prime owners over the past month:
- "I bought an XSE Premium back in October for $1700 under MSRP from a dealer in CT." RE
- "Paid $1K less than MSRP from a dealer in CT for an SE in Blueprint back in January." MK
- "We paid $500 below MSRP. We bought the dealership’s first Prime, and I think we were just lucky." SB
- "$250 off MSRP in California." JB
- "Paid MSRP." SM
- "At MSRP." GW
- "At MSRP." CD
- "XSE Premium at MSRP in CT in the end of January." SC
- "XSE at MSRP a week ago (late Feb) - upstate NY." AM
- "XSE premium in California at MSRP." KE
- "XSE premium last month paid MSRP." KM
In addition to the owner reports above, one Toyota dealer in New Jersey posted in some RAV4 Prime fan clubs that its price for SE trims was $500 below MSRP for a period of time in February. It was a limited-time sales promotion, but still welcome news.
Not All Toyota RAV4 Prime Discounts Are "Real"
Our top-of-page image shows a dealer-posted advertisement for a RAV4 Prime with a discount typical for Toyota vehicles. We phoned the dealer and discovered that it was a little too typical. The dealer explained that they accidentally applied the normal RAV4 discount to the Prime trim. After we alerted the sales manager of the dealer chain the price offer was removed and a corrected post was displayed.
Will RAV4 Prime Discounts Increase Soon?
The RAV4 Prime continues to be a hot seller. With its next increased delivery volume about to start in late spring, we predict that MSRP sales will be the norm, and that discounts of $500 to $1,500 will be available on SE trims. The big wildcard here will be the coming change to EV tax law that Congress is planning to institute at the request of the Biden administration. Will PHEVs be included? Will income caps preclude many buyers from being able to take advantage of the tax incentive? Nobody knows.
Watch Torque News for a possible RAV4 Prime delivery report update coming later in the week.
John Goreham is a long-time New England Motor Press Association member and recovering engineer. As part of his engineering program, John conducted a year-long study of the thermal management of electric vehicle batteries as part of a team that built an EV from scratch. In addition to Torque News, John's work has appeared in print in dozens of American newspapers and he provides reviews to many vehicle shopping sites. You can follow John on Twitter, and view his credentials at Linkedin
Top-of-page screenshot courtesy of a Boston-Metro-area Toyota dealer. See story for details. RAV4 Prime image courtesy of Kate Silbaugh.