What should I pay for a 2016 Toyota Rav4?
June 3, 2020 7:04 PM
I want to buy a 2016 Rav4 which is listed for $20,000 — is right now during covid an opportunity for a cheaper price? And if I'm paying cash, how much should I offer?
Mostly the world of bargaining is very foreign to me, so bear with me. Also I haven't owned a car in 10+ years and have forgotten everything I knew.
So... a new Rav4 is usually $25,000. The 2016 models I'm seeing are more like $20k — I could pay that in cash at a local dealership, but since I'm a) paying cash and b) since business is potentially down because of Covid, what is a reasonable offer to make?
If I said $15,000 would they laugh at that? Obviously I could make that offer and just see what happens, but the truth is I really have no idea what I'm doing. I figured cash would make them much more willing to come down, but I just don't know.
Mostly the world of bargaining is very foreign to me, so bear with me. Also I haven't owned a car in 10+ years and have forgotten everything I knew.
So... a new Rav4 is usually $25,000. The 2016 models I'm seeing are more like $20k — I could pay that in cash at a local dealership, but since I'm a) paying cash and b) since business is potentially down because of Covid, what is a reasonable offer to make?
If I said $15,000 would they laugh at that? Obviously I could make that offer and just see what happens, but the truth is I really have no idea what I'm doing. I figured cash would make them much more willing to come down, but I just don't know.
No, you're not going to get a deal, would be my guess . Inventory is in short supply. Not only have production lines been shuttered, but used car auctions for dealers are just beginning to restart. Also, cash is less attractive than financing to a dealer.
And offering 25% less than the asking price for a quality vehicle in high demand at the best of times will get you a big horse laugh.
posted by mojohand at 7:36 PM on June 3, 2020
And offering 25% less than the asking price for a quality vehicle in high demand at the best of times will get you a big horse laugh.
posted by mojohand at 7:36 PM on June 3, 2020
Cash will have the opposite effect - the dealership makes (significant) money off of financing, so a cash-paying customer is actually less desirable than a financed customer. You can try avoiding mentioning paying in cash, but if you do, the dealership will assume you're paying in cash anyway and/or may make their agreement conditional on financing.
From what I've seen (by far not an expert), most dealerships are not really stressed right now and aren't offering significant deals. The USA, in general, is still dependent on cars and customers will buy those cars sooner or later.
When you offer a price, you should be clear what you are actually agreeing to. If you only negotiate the listed "price" of the car, the dealer will likely accept any reasonable offer you make, then make it back up with junk fees (example - doc fees - no, it doesn't cost $995 for the dealership to print out ~20 pages of paper) or add-ons ("prep fees" or "undercarriage protection fees"). Further, any price will have tax added onto it. The easiest way to negotiate is solely negotiating out-the-door pricing.
I don't know the specifics of the vehicle you're looking at, the mileage, or the options, so I have no idea if $20K is reasonable or not. There are some models in my area (a large metropolitan city) priced below that (down to $17K) and above that (up to $26K). So, off-hand, $20K seems "sane", but not necessarily a deal or a rip-off. Most dealerships don't really operate with a lot of margin, so I wouldn't expect you to be able to negotiate more than, say, $500-$1K off the price lest other considerations (for instance, a really ugly color and/or weird configurations like FWD models). $15K is not going to happen and I would suggest not trying.
As a general comment, lightly used Toyotas aren't generally a great deal. Toyotas have very little depreciation, which makes them great for new car purchases. However, competing models (Honda CR-V, Hyundai Santa Fe, Kia Sportage) will have significantly more depreciation (upwards of 50% for a four year old car). There's no reason to let someone else take advantage of 4 years of use for a Toyota and you only get a 20% discount.
posted by saeculorum at 7:39 PM on June 3, 2020
From what I've seen (by far not an expert), most dealerships are not really stressed right now and aren't offering significant deals. The USA, in general, is still dependent on cars and customers will buy those cars sooner or later.
When you offer a price, you should be clear what you are actually agreeing to. If you only negotiate the listed "price" of the car, the dealer will likely accept any reasonable offer you make, then make it back up with junk fees (example - doc fees - no, it doesn't cost $995 for the dealership to print out ~20 pages of paper) or add-ons ("prep fees" or "undercarriage protection fees"). Further, any price will have tax added onto it. The easiest way to negotiate is solely negotiating out-the-door pricing.
I don't know the specifics of the vehicle you're looking at, the mileage, or the options, so I have no idea if $20K is reasonable or not. There are some models in my area (a large metropolitan city) priced below that (down to $17K) and above that (up to $26K). So, off-hand, $20K seems "sane", but not necessarily a deal or a rip-off. Most dealerships don't really operate with a lot of margin, so I wouldn't expect you to be able to negotiate more than, say, $500-$1K off the price lest other considerations (for instance, a really ugly color and/or weird configurations like FWD models). $15K is not going to happen and I would suggest not trying.
As a general comment, lightly used Toyotas aren't generally a great deal. Toyotas have very little depreciation, which makes them great for new car purchases. However, competing models (Honda CR-V, Hyundai Santa Fe, Kia Sportage) will have significantly more depreciation (upwards of 50% for a four year old car). There's no reason to let someone else take advantage of 4 years of use for a Toyota and you only get a 20% discount.
posted by saeculorum at 7:39 PM on June 3, 2020
Maybe this is helpful?
If it were me, I would go look at the car, drive it, and then go home. Determine its value as defined by the online value guides (specifying the exact options it has and its mileage). A very low mileage car may be likely to sell above "book" because people like very low mileage cars, so keep that in mind.
I personally might start negotiations at "private" seller book value, if a dealer, or about 10% below the asking price, if a private seller. I always ignore the dealer's window/ad price, unless it's a no-haggle dealer, in which case there is no negotiation anyway...
(Remember that a dealer is going to sock you for sales tax and licensing fees right at the time of sale, whereas you will pay those when you transfer the title yourself when buying private party cars. In my state, those fees are about 10% of the price of the car.)
posted by maxwelton at 8:27 PM on June 3, 2020
- Make sure you know what the models and options are, and what's important to you and what isn't. I'm not that familiar with Rav4 models, but there are things that people like and are willing to pay for, even used, and other things which were options when new but which no one really is willing to pay extra for used (an example of the former might be a "conveinance package" which includes keyless entry and bluetooth, and an example of the latter might be a "limited edition" color or special wheels).
- Learn when a new body style showed up, and which years that encompasses, and target those years (or at least the years which have the features you want). Most cars are fairly static during the three to six year run of a particular "generation" of the model. For example, the 2016 RAV4, according to Wikipedia, is a "4th generation" RAV4, which covers 2012 to 2018, with a facelift in 2015. Targeting a range like this allows you to get what you want but allows flexibility when shopping. Obviously, newer is often better, but is a 2018 (say) $9,000 better than a similar 2013 for you? It may be, or you might be fine with the earlier model.
- When you're shopping, keep your eye on the ball as far as the features you want, a car will come along with them. Never pay extra for stuff you don't care about unless the car has the stuff you want and otherwise seems great.
- Use kbb.com and edmunds.com to establish what the value of the particular car you're looking at is in your area, down to the color and options. Also use those guides to get an idea of what the price range is going to be. Most sellers ask more than they'll accept, but also be prepared to spot cars which owners just want to get rid of. I've sold several cars UNDER kbb value just because I wanted a quick sale more than I wanted another few hundred dollars, and they sold instantly, generally. "Condition 1" or "Excellent" cars, as valued by those guides, don't really exist in the real world, they describe cars in as-new condition. Everybody selling a car bumps up their condition by one or more slots, just keep that in mind. Note that the value will be higher if the car is being sold by a dealer.
- Dealers will generally not be excited to go under "dealer book" value. That said, the price in their ads, or on the window, often has little to do with the "real" price they're willing to take, unless they are a carmax-style no-haggle dealer. I've seen cars with window prices 2x what the "real" price of the car is!
- Private owners often have pretty high estimation of their car's value. I'd skip looking at any private party cars which are well over book value...in my experience, those folks are impossible to deal with. But I personally prefer buying private party cars from reasonable people. Dealers just kinda suck, mostly. (I did have a pretty good carmax experience.)
- Always get a carfax or equivalent, and always walk from a car which doesn't have a clear title (i.e., rebuilt or salvage). I also tend to walk from cars with big accidents or more than a single accident, or seventeen owners in three years. Your tolerance may be higher or lower. Sellers should be willing to pay for a carfax, since they can share it with any possible buyers, and savvy sellers often have them already. Nearly every dealer has a relationship with carfax or their competitors.
- On late-model used cars, barring any other factor, miles (or kms) on the odometer will be the biggest factor governing the price of otherwise similar cars. There's no guarantee a 30,000-mile car is "better" than a 75,000-mile car of the same year, but...it probably has more life left in it. Plus if you buy a new-enough car with low-enough miles, you may still be within the factory warranty period, which is worth some peace-of-mind. (I don't really care that much, myself, but if I have to scratch my head and wonder how much you have to drive every day to get that many miles on a x-year-old car, I skip it.)
- Always shop around a bit. Even if the 2016 you saw seems perfect, spend an hour or two checking out the ads on auto.com, autotrader.com, kbb.com and other sources, just to be sure the car you're looking at isn't an outrageous outlier.
- HAVE YOUR FINANCING IN ORDER. If you need a loan, get pre-approved by your bank or credit union. If you're paying cash, you're golden. Don't ever finance a used car via a dealer.
- Fall in love AFTER you buy. Always be willing to walk, there are lots of cars out there.
If it were me, I would go look at the car, drive it, and then go home. Determine its value as defined by the online value guides (specifying the exact options it has and its mileage). A very low mileage car may be likely to sell above "book" because people like very low mileage cars, so keep that in mind.
I personally might start negotiations at "private" seller book value, if a dealer, or about 10% below the asking price, if a private seller. I always ignore the dealer's window/ad price, unless it's a no-haggle dealer, in which case there is no negotiation anyway...
(Remember that a dealer is going to sock you for sales tax and licensing fees right at the time of sale, whereas you will pay those when you transfer the title yourself when buying private party cars. In my state, those fees are about 10% of the price of the car.)
posted by maxwelton at 8:27 PM on June 3, 2020
There was an article on Jalopnik about this the other day from their professional car buyer. Since there aren’t many sales coming through the door, dealers are trying to make each one that does, count. They’re not going to sell a car below their cost and lose more money than they already are just keeping the lights on.
Also, if you offer a price that’s too low you might not even get a response back. They’ll see you as either a not-serious buyer or too much work to make the sale since you have an unrealistic price in mind.
posted by hwyengr at 8:33 PM on June 3, 2020
Also, if you offer a price that’s too low you might not even get a response back. They’ll see you as either a not-serious buyer or too much work to make the sale since you have an unrealistic price in mind.
posted by hwyengr at 8:33 PM on June 3, 2020
I've seen a few YouTube videos where they strongly recommend you keep your mouth shut and nod when they talk about financing until the point that you are sat down and about to pay, when it becomes difficult for the dealer to rethink the price. They are looking for kickbacks from the loan companies, and your path of strength is to let them make an offer assuming that they will are a kickback but not contingent upon it. As someone above said, get it clearly stated what is included in that price, what extra charges there will be, and walk away even if the documents are in front of you if that isn't the deal they state - they're relying on your politeness to hold you to a deal you didn't agree to.
Other than that the usual game is to play dealers off one against another - 'I have an offer in hand for the same car at a lower price/ a better car at the same price'. Best that you do have an offer - at least for me, because I can't lie with a straight face, but also because it won't be implausible sounding.
Finally, I've heard that end of the month or quarter can be more favourable as salespeople make up their quotas for commission. I think that one is hard to prove or disprove, plus there's nothing saying a month end has to be the end of the calendar month.
posted by How much is that froggie in the window at 9:11 PM on June 3, 2020
Other than that the usual game is to play dealers off one against another - 'I have an offer in hand for the same car at a lower price/ a better car at the same price'. Best that you do have an offer - at least for me, because I can't lie with a straight face, but also because it won't be implausible sounding.
Finally, I've heard that end of the month or quarter can be more favourable as salespeople make up their quotas for commission. I think that one is hard to prove or disprove, plus there's nothing saying a month end has to be the end of the calendar month.
posted by How much is that froggie in the window at 9:11 PM on June 3, 2020
maxwelton's answer is excellent. Absolutely second the recommendations for Edmunds and Kelley Blue Book.
My only additional recommendation would be to use a car buying service. We used services from USAA and our credit union for the last two cars we bought.
posted by kirkaracha at 11:19 PM on June 3, 2020
My only additional recommendation would be to use a car buying service. We used services from USAA and our credit union for the last two cars we bought.
posted by kirkaracha at 11:19 PM on June 3, 2020
When bargaining with dealers, I would add, make sure you are adamant that your offer includes all dealer fees, minus sales tax and state licensing fees. Or make allowances in your offer for the tax and licensing fees; in this case, in my state, on a car you wish to buy for $15,000: "I'll give you $16,500...but that is literally 'out-the-door'--my offer includes the sales tax and license fees."
(Another thing to note in negotiations with dealers: where you live and where you buy the car may have quite different licensing fees. Buying annual tabs in my county is less than half the cost of buying tabs just a few miles away in a major metro area. That can make a difference when negotiating with a dealer. When considering the hypothetical offer above, there is actually an extra $200 profit for the big-city dealer because of where I live, vs. someone from their neighborhood offering the same amount on the same terms.)
posted by maxwelton at 11:28 PM on June 3, 2020
(Another thing to note in negotiations with dealers: where you live and where you buy the car may have quite different licensing fees. Buying annual tabs in my county is less than half the cost of buying tabs just a few miles away in a major metro area. That can make a difference when negotiating with a dealer. When considering the hypothetical offer above, there is actually an extra $200 profit for the big-city dealer because of where I live, vs. someone from their neighborhood offering the same amount on the same terms.)
posted by maxwelton at 11:28 PM on June 3, 2020
(Meant to add to above that dealers love to have "paperwork completion fees" and "car prep fees" and "salesman mustache wax fees" and on and on, which magically show up when the paperwork is placed on the table. It can add up to hundreds of bux. Walk if they don't strike them if you made an offer contingent on there being no hidden fees.)
posted by maxwelton at 11:32 PM on June 3, 2020
posted by maxwelton at 11:32 PM on June 3, 2020
From what I've seen (by far not an expert), most dealerships are not really stressed right now and aren't offering significant deals.
They are, for brand new cars.
The ports are full of acres and acres of new cars. People don't buy cars when they are afraid the economy is going to implode. Plus, for like 2 months you couldn't go out and buy one anyway.
Hell, I'm seeing commercials for 0% for 72 months on some cars.
And for Toyota specifically, a buddy who works for them (admittedly he builds their NASCAR engines and doesn't work in the sales part of corporate) says they are having the best dealer incentives during the 8 years he's worked there.
But, that means about jack shit when it comes to used cars. The dealer might have a few extra around because of the quarantine, but those parking lots full of new cars at Port of Long Beach don't matter. In fact, w such good deals from the manufacture on new inventory, there might even be less motivation to negotiate on the used ones.
All that said, 6 months ago I paid the private sale KBB for a 2013 Rav4 with 33k miles here in Southern California, and it was like $18k. For something 3 years newer, I'd expect you'd have to pay that much unless the mileage is incredibly high.
posted by sideshow at 12:00 AM on June 4, 2020
They are, for brand new cars.
The ports are full of acres and acres of new cars. People don't buy cars when they are afraid the economy is going to implode. Plus, for like 2 months you couldn't go out and buy one anyway.
Hell, I'm seeing commercials for 0% for 72 months on some cars.
And for Toyota specifically, a buddy who works for them (admittedly he builds their NASCAR engines and doesn't work in the sales part of corporate) says they are having the best dealer incentives during the 8 years he's worked there.
But, that means about jack shit when it comes to used cars. The dealer might have a few extra around because of the quarantine, but those parking lots full of new cars at Port of Long Beach don't matter. In fact, w such good deals from the manufacture on new inventory, there might even be less motivation to negotiate on the used ones.
All that said, 6 months ago I paid the private sale KBB for a 2013 Rav4 with 33k miles here in Southern California, and it was like $18k. For something 3 years newer, I'd expect you'd have to pay that much unless the mileage is incredibly high.
posted by sideshow at 12:00 AM on June 4, 2020
I'm not sure your location, but you should look at Avis car sales. They have 2019 Toyota Rav 4 for ~20,000 ( a few more, a few less right now). They also don't negotiate prices which can be helpful if that stresses you out.
(It stresses me out, so....).
posted by aetg at 4:43 AM on June 4, 2020
(It stresses me out, so....).
posted by aetg at 4:43 AM on June 4, 2020
They are, for brand new cars.
This. Someone I know just bought a Toyota and was amazed at the price and financing they were able to negotiate. The key question is whether the dealer has the same motivation to sell a used car, or if they are happy to have it sit for a while longer, waiting for the reopening. I don't think you will know the answer to that without making a low offer and seeing how they respond.
I agree completely with those suggesting to negotiate for the out the door price; that let's you not care about what they do with their weird fees and so on, because you are just focused on the total number.
posted by Dip Flash at 5:52 AM on June 4, 2020
This. Someone I know just bought a Toyota and was amazed at the price and financing they were able to negotiate. The key question is whether the dealer has the same motivation to sell a used car, or if they are happy to have it sit for a while longer, waiting for the reopening. I don't think you will know the answer to that without making a low offer and seeing how they respond.
I agree completely with those suggesting to negotiate for the out the door price; that let's you not care about what they do with their weird fees and so on, because you are just focused on the total number.
posted by Dip Flash at 5:52 AM on June 4, 2020
I panic-bought a car right before Covid hit, and prices have dropped $2k-$3k since then. So I think the Covid discount may already be baked in.
posted by RobotVoodooPower at 8:59 AM on June 4, 2020
posted by RobotVoodooPower at 8:59 AM on June 4, 2020
My son is selling a truck, and the broker told him that their business was up significantly because the name-brand dealers will still closed. So there's that.
posted by summerstorm at 9:14 AM on June 4, 2020
posted by summerstorm at 9:14 AM on June 4, 2020
https://www.autotrader.com/ has been a good resource for me when I want to comparison shop. For example, last time I bought a Toyota I got a certified one and had a great experience with it. So I looked at certified RAV4's in the area listed in your profile, 2016 or newer, and there are a ton of options in the range of $17k. This makes me think that $15k for not-certified is not too far off. Of course it totally depends on mileage and features and stuff.
I work with someone who used to sell cars at a Toyota dealership, and he says the dealership makes a ton of profit on financing but that profit doesn't necessarily go to the individual sales guys. Not sure if that's true anymore. Dealers do have a lot of tricks to talk you into spending more than you want to, and they totally do rely on you not wanting to feel rude and turn them down. Don't be afraid to be socially awkward or even rude and walk away if something seems fishy or if you want more time to research something.
There are lots of good resources on AskMe about car buying, like this question and this question.
posted by beandip at 9:50 AM on June 4, 2020
I work with someone who used to sell cars at a Toyota dealership, and he says the dealership makes a ton of profit on financing but that profit doesn't necessarily go to the individual sales guys. Not sure if that's true anymore. Dealers do have a lot of tricks to talk you into spending more than you want to, and they totally do rely on you not wanting to feel rude and turn them down. Don't be afraid to be socially awkward or even rude and walk away if something seems fishy or if you want more time to research something.
There are lots of good resources on AskMe about car buying, like this question and this question.
posted by beandip at 9:50 AM on June 4, 2020
Another data point: back in October 2019 I bought a no-accident certified 2017 RAV4 XLE AWD with ~17,000mi for $21,500 in cash out the door supplemented by a trade-in of a 2001 Honda Accord with ~158,000 mi, a check engine light on for emissions issues, and a handful of other problems and a couple accidents (not mine!). I felt like it was a good deal then and as per my friends currently looking for cars now, prices haven't really moved much but financing has improved by a decent margin (which doesn't matter if you're paying in cash). I'll concur that dealerships would prefer you not pay in cash because they make money on financing, so that is actually a small disadvantage but probably less so in a time where you can get low to 0% financing.
You're probably already aware, but when figuring out how much they'll be realistically willing to accept you'll need to take the trim level into account (I wanted all the newer safety tech like blind spot light sensors, backup camera, rear movement sensors, etc, and I figured that upgraded trim level upped the cost by around $2000), if it's a hybrid, how many miles it has (seemed to cost ~$1,000 lower per 10,000 miles or so), if it's had any accidents, the condition of the vehicle, certification/warranties, and color (some colors are not very popular and can lower price a little).
posted by vegartanipla at 11:17 PM on June 4, 2020
You're probably already aware, but when figuring out how much they'll be realistically willing to accept you'll need to take the trim level into account (I wanted all the newer safety tech like blind spot light sensors, backup camera, rear movement sensors, etc, and I figured that upgraded trim level upped the cost by around $2000), if it's a hybrid, how many miles it has (seemed to cost ~$1,000 lower per 10,000 miles or so), if it's had any accidents, the condition of the vehicle, certification/warranties, and color (some colors are not very popular and can lower price a little).
posted by vegartanipla at 11:17 PM on June 4, 2020
I have (not recently) test-driven a car, found it be a bit over my price range, politely left, and gotten a much better offer the next day, so, leave your phone and email, though car sellers are appalling at not using technology adequately. You might have a bit more leverage at the end of a month; quotas are a thing. You can say That's more than I can pay, can you make it 15,000? Don't be shy. Some car sellers are shysters and none of them are shy.
posted by theora55 at 12:33 PM on June 6, 2020
posted by theora55 at 12:33 PM on June 6, 2020
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