This is the worst time to buy a Prius Prime in terms of cost to buyer

KBB just announced that average new car is now selling a couple of thousand dollars below MSRP. Priuses are still selling with fat markups, and Toyota included an especially large profit margin (about $10,000?) on Prius Prime.

I expect a new Prius Prime to sell for $10,000 less in a year if not even at a lower price. I think there will be deep dealer discounts (up to $4,000) and large factory rebates (up to $2,000) again in a year, and Toyota may even reduce MSRP.

The only reason I would trade in now would be if I can get a good price for my 2021 Prius Prime Limited.

 

It is getting more competitive at the Toyota dealers.

https://tiremeetsroad.com/2023/04/11/fight-breaks-out-between-two-salespeople-toyota-of-milpitas/

 

Yep, it is yet more sign that Prius Prime wil sell a lot cheaper next year.

The only reason for me to trade in now would be because used-car prices will go down, too. However, perhaps I should recalculate.

The interest in Gen 5 Prius and Prius Prime will die out soon—it is typical for people to rush in when a new model arrives, making the car very expensive.

 

I learned a while back that the dealer's invoice is not what the dealers actually pay to Toyota. So, yes, this is a trick. They also showed me the dealer's invoice when I bought my silver 2020 Prius Prime XLE, and no, that was much higher than the actual cost to the dealer.

Consumer Reports explains car pricing.

Guide to car-pricing terms—Consumer Reports

Guide to Car-Pricing Terms
A glossary of common terms shoppers need to understand when pricing a new car
By Consumer Reports
August 01, 2017

The most effective way to negotiate a new car's price is to find out what others in your market have paid for the same vehicle. You can gather information from a variety of sources and put it together yourself, starting with the dealer's cost and bargaining up from there. To figure out the true dealer cost on your own, you have to piece together the various elements of the auto-pricing puzzle.

Alternatively, you can use the ConsumerReports.org Build & Buy service, which does all the legwork for you. Whichever way you go, here are the terms with which you should be familiar when shopping for a car:

Manufacturer's Suggested Retail Price
The Manufacturer's Suggested Retail Price (MSRP) is the price that the automaker publishes for any given model and trim line. Because it's "suggested," dealers are free to sell a vehicle for a figure that's higher or lower than the MSRP.

The base price, excluding any options, destination charge, or other fee, is the initial figure you'll find in pricing guides, most car reviews, and on pricing websites.

The total MSRP, commonly called the sticker price because it's the bottom-line figure on a car's window sticker, is the base price plus any options, option-package discounts, and destination charge.

Unless a model is in very high demand, you can generally buy a vehicle for less than the sticker price.

Dealer-Invoice Price
The invoice price is the figure printed on the dealer's invoice from the manufacturer. Once difficult to find, invoice prices are now commonly available online and in print, including our new-car buying guides. In fact, dealer-invoice prices have become so ubiquitous that they are even listed on some automaker websites. In addition, at many dealerships, salespeople will show you the invoice for the car you're interested in, often as a way to let you know how "little" markup there is.

The dealer-invoice price, however, is not necessarily what the dealer really paid for the car because there are often behind-the-scenes payments, such as unadvertised dealer sales incentives and holdbacks (or manufacturer refunds) that give the dealer extra profit. What you see on the invoice is only part of the pricing puzzle. You'll need a few more pieces to form the complete picture.

Dealer Sales Incentives
These are unadvertised payments that the manufacturer offers a dealer for selling certain models. The dealer can pass along the incentive to the buyer in the form of a price reduction, or keep it as added profit. These payments are usually used to push sales of slow-selling or overstocked models. These types of incentive programs can come and go quickly depending on supply and demand, and some can be regional, depending on local market conditions.

Holdbacks
You can think of a holdback as a refund for the dealer that he or she gets after the vehicle has been sold. Depending on the automaker, a typical holdback is about 2 or 3 percent of either the MSRP or the invoice price.

For example, if a vehicle has an MSRP of about $25,000, a dealer's holdback might be as much as $800. Holdbacks are a way of reimbursing dealers for the financing costs of keeping vehicles in inventory. Because the dealer will receive the entire holdback amount, the sooner the vehicle sells—thereby reducing the finance costs—the more hold-back that can be kept as profit.

Dealers usually won't bargain away their holdback, but knowing about it gives you perspective on their profit margin. So when the salesperson claims that the dealership isn't making any money on a car, you'll know whether it's just a line or not.

Rebate
This is a direct-to-the-buyer payment from the manufacturer to encourage you to purchase a particular vehicle. Many buyers use it as part of the down payment to reduce the amount that needs to be financed. Rebates are widely promoted in advertising but they can be national or regional, and they don't last forever. It pays to check out the details.

Market Adjustment
A market adjustment, or dealer adjustment, is an amendment added to the window sticker that can pad hundreds or even thousands of dollars over the manufacturer's sticker price. You'll typically find these on a highly anticipated model that's been recently introduced or one that has a long waiting list of buyers.

You can try to negotiate this figure, but if the vehicle is selling well, the dealer won't have much incentive to work with you. If you have to be the first on your block with a hot new model, this could be the premium you pay. But if you can be patient and wait awhile to buy—sometimes only a few months—these dealer adjustments will usually disappear.

Ultimately, that markup will become added depreciation once supply and demand level out; there are few cases where you'd have the potential to recoup that money.

 

No, not paid for—in fact, my loan payments will be reduced by $200 or more after trade-in, and I want TSS 3.0. TSS 3.0 is the main upgrade over my 2021 Prius Prime Limited, and I use the driving-automation functions of TSS 2.0 all the time.