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Holdback on the Prius?

Discussion in 'Gen 2 Prius Main Forum' started by Arklier, Jan 10, 2006.

  1. Arklier

    Arklier New Member

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    Toyota offers a holdback to the dealer of 2-3% on most of their models. Does anyone know what percentage (if any) Toyota gives on the Prius?
     
  2. tag

    tag Senior Member

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    Pretty sure it's 2% of base MSRP across the entire line of Toyota/Lexus models.
     
  3. TransplantInTN

    TransplantInTN New Member

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    My guess is nothing since - in theory - Toyota dealers must prove they have an order for a Prius (deposit) before placing the order with Toyota. The purpose of the holdback is to reimburse the dealer for the cost of carrying the inventory on their lot until the car is sold . . . but the Prius seems to already be "sold" from the time it arrives. So, dealers aren't having to float any money between arrival and purchase. This is only my guess - I don't know for certain. If I were Toyota - I wouldn't offer them one! Dealers make their money off difference btw invoice and MSRP and . . . . drumroll . . . FINANCING!!!
     
  4. Arklier

    Arklier New Member

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    A holdback is to (theoretically) reimburse the dealer for things like advertising and the interest that the car accrues while sitting on the lot until sold, since the vast majority of dealerships don't actually own the cars they sell. The cars are owned by their lending institution, which from what I hear, is usually either a large bank or owned by the manufacturer such as GMAC. In this case it would be Toyota.

    In general, I have read in magazines such as Motor Trend and Consumer reports that Toyota offers a 2% holdback on the MSRP price of the vehicle, but it varies by model. It's pretty standard for Japanese cars. Domestics usually have a 3% holdback. That's how dealers can sell cars at 'actual factory invoice' and not go out of business. As for the Prius, I would be surprised if Toyota wasn't offering a holdback to the dealers, since in some areas of the country (unfortunately not mine) the cars are moving very slowly. Plus there's the cars that sit on the lot for a month or two because the dealership is trying to charge $1,000+ over MSRP.

    Let's do the math here:

    $21,725 (base MSRP) x 0.2% = $434.50

    That's on top of the $1,719 of profit between the invoice and MSRP. If you buy a base Prius at MSRP when it arrives at the lot, you've given the dealer a profit on the car of $2,153.50. That's not even counting packages.

    Dealers make their money any way they can. It's just that some of them are more aggressive and shady about going after the money than others.