Buy or Wait?

if you commute that many miles and it is not going to change, i would definitely do it.

 

DON'T DO IT!

The dealer is not trying to do you a favor....they're trying to do THEM a favor.
If you want the G3, here's a few things you can do to save some moolah.
1. The RAV-4 is probably paid off if it's an 06, and it's probably in good shape if the dealer was sniffing at it. Did you know that there's a shortage of used cars on the market at present?
That's because of a combination of the (some say previously) ravaged economy and the fact that sex is rather fun. In other words...people are holding on to their new cars longer, and there are more people driving every year.
What did the dealer offer you for the RAV-4? What is the current retail value for the R4? Usually the dealership will kindly "offer" you trade-in value for the used car, and sell it to some sap for a few hundred bucks off of the "retail" value of the car.
Whatever the difference is? (and it's almost always in the thousands...) THAT's what you're paying the dealer to sell your old car for you. Money in YOUR pocket if you do that work yourself.
Oh...and that few hundred bucks? They're not giving that up at all.
Read on.

The last time I checked my credit union was writing money at less than one percent for new car loans.
Give me a second....I'll check again. <pause....>
OK. It's gone up to 1.79% for 60 months. You never really want to go 60 months if you can aviod it (some poor souls go 72 months... )
SO....over 5 years you're looking at about 1150 bucks in interest that you'll save by one of their zero-interest loans....BUT...what are you giving up? I've always found that if I walk into a dealership with a pre-approved loan from my credit union, they're much more willing to cut a quick, skinny, deal since we don't have to go through the "how much do you want your payment to be?" kabuki dance.

It may work different elsewhere but what I do is get pre-approved for what I intend to spend. I find out the MSRP....meaning the REAL MSRP...add delivery.....subtract any "non-optional options" and START negotiating at that point.I don't pay MSRP, and after a tentative deal is struck I offer the "finance manager" a chance to find a cheaper loan (they won't usually) and we're DOONE!
No GAP.
No "zero interest" dangle.
No Warranty...(especially if you're in a CARB state)
No sweat.

As far as waiting for the G4?
Why not wait a little and get a G3 when all of the early adopters are salivating over the G4's?
The G3 is a GREAT car...and next year it will be just as great!
Or...you can smell that new car smell in a few weeks after YOU sell YOUR Rav-4 privately!

Nothing wrong with buying a new car every 6-7 years if you can afford it.
Buy smart?
And you'll be able to afford it

 

If the older car is running well, it is extremely difficult for a brand new Prius to pencil out as a cost savings on gas alone. If that 75% of the new payment, not offset by gas savings, is larger or lasts longer than your current payment, then cost arguments suggest waiting. If the older car is actually paid off, or will be soon, this swap does not make sense on finances alone. You have to want it for other reasons.

As for the first year of a redesign, I'm no longer leery of that. Yes, my '86 Accord was the first year of a major redesign, and it did have more troubles than my spouse's '89 Integra, the last year of that series. But that Accord was still good enough to keep for 235k miles, until getting replaced (more for modern safety than for mechanical issues) with a 2010 Prius. That Integra also needs to go for safety reasons (no airbags, no ABS, little side impact protection, etc.) but is running so well that she refuses to part with it.

Likewise, the household's '97 Subaru was the first of a major series. At 175k miles it now has serious repair-or-replace problems, but those problems are shared with all Subarus of that era, not specific to a first year.

My very early base 2010 Prius did have some rattle issues, but was upgraded to a nicer 2012 too soon to learn if it had any serious problems with that new design.

 

i would do it too.. well i did do it cause i commute 120 miles a day
But my situation was a little different... i traded a truck in that i was paying more for then i pay now for the Prius, saving a ton of money on gas( i was driving my wife's Ford Edge (26MPG) not the truck)... so my total monthly expense has gone down almost $200. So it made scene for me.

if i had a paid off car... if there wasnt anything wrong with it, i wouldnt get into payments for as long as i could.

 

Another option to consider if you live in CA, and you use the car for work commuting, especially since you are already driving a Rav4, is the Rav4 EV. I bought the Rav4 EV in May and use it for my daily 50 mile round tip commute and weekend chores. I make this commute twice and charge up every second day with 30 to 40 miles remaining in the battery. However, I drive slow and more typical driving style will probably give you a range of 100 miles. Toyota changes the Rav4 EV incentives every month or so. Current incentive that ends Sept 3 make leasing a better option. List price is ~ 50K but I got mine in May for 33,400 (10,000 federal and state rebate, 9,300 Toyota rebate and SF dealer price reduction. CA taxes and fees included). For comparison I bought my 2010 Prius for 30K all taxes and fees included back in 2009. The cost to fill the battery at home is 1/3 to 1/2 of what I payed to fill up my 53MPG 2010 Prius (1/3 to 1/2 depending on how heavy your foot is on the accelerator!).

 

Thats a steal! Can you further explain the $9300 Toyota rebate and SF dealer price reduction? IS the $10,000 fed state rebate still available? thanks.

 

The 9,300 was the rebate for Northern CA Toyota dealerships in May. The current offer makes leasing more attractive. The dealer price reduction was just typical car sales negotiation. Dealer: I can only sell for X. Me: I can only buy for X-2000, etc. The $7500 fed rebate is available for anyone in the US who buys an electric vehicle (electric only). You get that rebate when you file your annual taxes (so I'll get mine next April), the $2500 CA rebate is available only to CA residents, each state varies and some don't have rebates. In CA we get the rebate after the vehicle is registered and after filing the appropriate form.... it only took about a month for me to get my $2,500 check from California. For leasing deals / questions and for interested out of state buyers I'd suggest going to this website:

Toyota Rav4 EV Forum - Toyota Rav4 EV Forum for the Rav4 Electric Vehicle

and clicking the link for "Buying a Toyota Rav4 EV". Lots of helpful folks on that forum and there are dealers who specialize in out of state sales and delivery who you can find on that forum.

 

For real.. i will a $7500 tax credit when i file taxes for this year since i bought a Prius? Wait i am leasing.. does that still apply?

 

The fed rebate is for plug in electric cars and varies by model. For the 2012 and 2013 Prius Plug In the rebate is $2500. For the regular old Prius: nothing.

 

I think you made the right choice. The "accountant" inside of me is saying that

 

I agree with Snocter the analysis depends a little on where you live. Here in VA I believe we have the strongest state tax "penalty" on a hybrid, in general we have some of the highest new car taxes. On the other hand other states encourage with incentives, HOV, or for plug-ins PiP state tax credit. Last Fall we had some wild year end sales back East and many traveled here especially for PiPs. Oregon is tax free? That's a defacto tax credit. also 0% financing is sometimes available.

 

RAV4 EV only available in CA but Dianne Whitmire on Prius Chat is leasing/selling them like hot cakes to out of staters. See her thread on it. RAV4 EV is most attractive in OR (tax free) CA (tax+HOV credits) WA and NJ (sales tax exemption for EV's), and CO (I believe $6000 tax credit in CO). Lesser extent MD and PA also give EV tax credits.

Fed $7500 tax credit as stated above unless you lease in which case you may be getting the tax credit indirectly via cheaper lease.