This is how a RAV4 that normally MSRPs for $26,350 quadrupled in price
Earlier this weekend, a window sticker on a 2021 Toyota Rav4 Prime XSE from Toyota of Oakland went viral. Although the RAV4 Prime XSE has a $49,659 MSRP, after you add the dealer installed options and crazy $40,000 markup, this particular RAV4 Prime has an overall price of $96,442.
Embed from Getty ImagesToyota of Oakland threw on an 80 percent markup!
How can they get away with this? Let me explain.
Not your average RAV4
Here’s the photo of the window sticker going viral posted on Reddit below.
Here’s the exact RAV4 on Toyota of Oakland’s website. They’ve taken down the original page, but I was smart enough to make an archive!
And here’s the factory window sticker for VIN JTMFB3FV6MD066074 embedded below.
Toyota RAV4 PRIME XSE windowsticker
This is no ordinary RAV4, this is the top of the line XSE trim level of their Plug-in Hybrid lineup. Toyota does not even list their electrified hybrids with their regular RAV4s, they get their own page.
Thanks to three electric motors (two up front and one in the rear) and an 18.1 kWH battery pack, there’s 302 HP on tap.
More importantly, the RAV4 Prime Hybrid has 42 miles of EV-only range and combined 94 MPGe.
It can hit 60 MPH in 5.4 seconds and is faster down the quarter mile than the Toyota Supra.
It has enough EV-mode range that you realistically, on a day-to-day basis, you don’t have to ever dip into your gas, seats 5, and is a Toyota, so it’s almost guaranteed to be reliable forever.
What does Toyota of Oakland have to say?
When news of this heinous added dealer markup first got out, other news outlets contacted Toyota of Oakland for a statement.
When Jalopnik editor Lawrence Hodge contacted Toyota of Oakland, the responding salesman did not confirm nor deny the markup but did imply it was legit and interested parties should come in if they want to talk numbers.
“You know, it’s just one of, uh,” stammered the salesman
You know, I don’t know the price, but uh, it’s just one of those things where you…you have to come in and sit down and talk over if you’re ready to make a deal.”
A conflicting answer from Twitter user @_baldtires says he called last week to check up on the validity of the window sticker and was told it was only supposed to be a $4,000 markup.
“Called this dealership last week, and they told me this was a mistake.” said Peter Holderith “Markup was reportedly supposed to be $4k, not $40k”
That was response was a bit surprising considering RAV4 Primes, on average, are commanding a $10,000 markup.
If it was really a typo, why would Toyota of Oakland repeat the typo, adding up the final value?
In addition, Redditor @Jimjh reports this exact dealership was commanding a $10,000 markup on a standard RAV4 Hybrid, not a Prime.
It doesn’t stand to reason they’d suddenly charge less markup for a more expensive trim level.
Toyota of Oakland’s reputation for notoriously high prices certainly doesn’t help the “typo narrative” either.
According to Redditor @EvenSevenOne,
“A year ago they (Toyota of Oakland) had one (RAV4 Prime) with a sticker for $20K over, but they immediately offered $5K over, which was the same price as other dealers. I walked.”
Several reviews on their Yelp page also corroborate their infamous markups. One reviewer claims a Sequoia had a $30,000 markup, while another says a RAV4 Prime had a $20,000 markup.
I think they were serious about that $40,000 markup and are now backpedaling thanks to all the negative press.
High demand
Every car manufacturer is cutting production (except Tesla, pivoting to microcontrollers) thanks to a chip shortage and Toyota is not immune cutting global production by 40 percent.
There are simply not enough new cars for prospective buyers.
One way for dealerships to manage inventory is to raise prices to meet demand. It’s not price gouging like people love to paint it as (because you don’t need RAV4 Prime hybrids to survive,) and is the S of MSRP (suggested) dealerships are choosing to ignore.
Right now, Regular gas engine-only RAV4s have around a $4,000 markup and Prime Hybrids carry around a $10,000 markup.
If you want to stick it to Toyota of Oakland and take your business elsewhere, guess what, you can! There are several Toyota dealerships close by selling for MSRP.
But as Redditor @NTheZone points out,
” A location in San Jose does sell for MSRP, but the waitlist has well north of 100+ people.”
And it’s not just California (excuse me…Commie-fornia, as y’all in the comments love to point out) it’s everywhere else too.
According to Redditor @funnyprofessor,
“I live in Cedar Rapids, Iowa. We have a local Toyota dealership that does not sell above MSRP. The waitlist is a bit long, but not that bad. The salesperson I talked to said they are about 5-6 months out on RAV4 Primes, but can order one.“
Think of the $40,000 as a $30,000 cut in line pass for people with Bay Area salaries.
If you want a RAV4 Prime Hybrid and don’t want to pay over MSRP you’ll have to wait at least six months, if you’re in the Bay Area, even longer.
If you want one right now NOT from Toyota of Oakland, you’re going to have to shop around and pony up a $10,000 markup like everyone else is.
And, if you want one in the Bay Area, live near this Oakland dealership, and don’t want to wait, you can pay this $40,000 markup and cut in line, no shopping around needed.
The Bay Area is different. Most tech jobs pay six figures, and financing $100,000 over five years (about $1,800/month payment), so you can drive a RAV4 Prime XSE today, is no big deal for most there.
I guarantee someone will finance one and not even care about the markup.
Might be a marketing move for free advertising
I’ve seen the above window sticker posted on Facebook, Instagram, Twitter, and it will soon hit other car blogs later today/
What’s the chance this window sticker is to get some press (however negative) out there? I’m sure the whole Bay Area now knows there’s at least one RAV4 Prime ready to finance with a fat ADM.
Heck, they got me to write over 1,000 words.
