Dealerships run on an interesting business model. They work in proximity with their designated automakers in a close and sacred bond. At the same time, they’re also independent businesses that tend to behave entirely in their own interests. Dealerships are now selling the 2024 Toyota Land Cruiser for over $20,000 above sticker, which is as good an example as you’ll ever get. As you’ll remember, one of the selling points of the new Land Cruiser is that it’s $30,000 cheaper than the outgoing model.
You can see for yourself! Over at Concord Toyota, they have not one, but two brand-new Land Cruisers up for sale. Each comes with a hefty “Dealer Adjustment” of $21,000. That would have you paying $97,345 for a truck with a suggested retail price of just $76,345. Call it what you want, but we all know what’s going on here. The dealer thinks they can get a wad of extra cash on the sale, and they’re not ashamed to ask for it.
The basic motivation here is to cash in on high demand. The Land Cruiser has always been one of Toyota’s proudest nameplates. It’s returned to the US market after the previous model ended production in 2021. The sharp design and classic name have seen it land with a splash, even if the US is now getting a Prado-based model instead of the full-fat J300.
These dealer adjustments have become routine in recent years whenever there’s hype around a new vehicle. The Ford Bronco and the C8 Corvette are other great examples of this. Ditto the Toyota GR Corolla and the Honda Civic Type R.
Concord Toyota isn’t the only dealer trying to make big cash on new Land Cruisers. Thompsons Toyota in California is asking for a similar $20,000 “market adjustment” too. Plus, they’ve included a $469 ceramic paint coating and $229 ETCH Theft Registration on the bill, too. Magnussen’s Toyota in Palo Alto has an example up for around $15,000 above MSRP, while Heritage Toyota in Harrisburg, PA wants a $10,000 premium.
Not every dealer is going so hot, at least in public listings. Don Wood Toyota in Ohio has a Land Cruiser up at $77,674, in line with MSRP. In the same state, Byers Toyota has a similar deal, too, as does Hosmer Toyota in Iowa. Indeed, you might consider traveling farther afield if you really need a Land Cruiser fast.
Dealer markups can be frustrating if you’re eager to buy a particular vehicle. You’re put in a situation where the manufacturer is perfectly happy to sell you a vehicle at a certain price, but you have to pay more to please a middleman who you have no choice but to deal with.
It’s frustrating, but it’s a fact of life in American auto sales. If you want a Land Cruiser, you’ll have to pick your dealer carefully to avoid paying through the nose for it.
Image credits: Toyota, Concord Toyota via Screenshot, Cars.com via Screenshot
These dealers suck and I hope no one pays that markup – but someone will. I just bought an entire vehicle for less than that markup. And it was a Porsche 958 Cayenne Diesel no less. For the suckers who pay that extra $21k markup on top of an already ridiculous sticker price for a Toyota – I hope they think about that.
Besides typical dealer greed, I’ll blame the “First Edition” model trim. That sounds like those sneakers people hoard & hide in the closet. Plus, the FE Land Cruiser has the cool but David Tracy not-recommended 1958 look. At any rate, the markups should come down a little after all the influencers get theirs and post their photos. Maybe a 2nd hand “First Edition” would be closer to original retail anyway?
This must be the value-add and consumer protection from those evil manufacturers that auto dealers keep
harpingpaying to politicians.People are always willing to throw away money to be first when something new and shiny comes out unfortunately. For people with more sense than money, I think the move will be to buy a used Lexus GX in a couple years and skip the Toyota as was the case with the last Land Cruiser and its Lexus twin.
Plus the Lexus comes in green.
It’s also an absolute gas hog while the Toyota is a hybrid. I think that matters to a fair amount of folks.
Yeah, but it’s a green gas hog.
The best part is that the markup brings it to the price of an LX!
One of the reasons I’m going to stick with Mazda. Even at the height of Covid they sold vehicles at MSRP and your discount came into play through the insane value of your trade in. Discounts are back not as high as before covid but discounts all the same.
I own a 2006 Sienna with 183K and it’s rape and pillage anytime I price out a minor or moderate repair. 699.00 to replace spark plugs.999.00 to replace valve cover gasket with a minor leak, Oil change 106.00
Sounds like you need to find a decent independent mechanic. Those stealership prices.
Name them and shame them.
We ran into this early last year trying to find a new Prius. We ultimately went to a car show since it was the only way to even see one in person, and the rep suggested to look for a car being sold by a Toyota Smartpath dealer on the Toyota website.
Essentially, it’s the Toyota version of buying online. The dealer is supposed to advertise their out-the-door price and if (and when) the car is still available, even for cars in transit – something not always clear on dealer websites since it generates sales leads. Some will still add a markup, but at least they are upfront about it. It seems like about 1/3 of the dealers within 100 miles of me offer this option, including a few that currently have Land Cruisers listed and available for MSRP.
I can’t entirely confirm all of the above is true (though my online research confirmed it at the time), my wife ultimately fell for a BMW i4 at the same car show. With the EV lease loophole and short supply of Priuses, it got us into a nicer car for less money much sooner.
I wanna know why anyone would drop over 40k on a Toyota, 50k all in. The fuck is going on with people? Granted, I’m the crybaby that whines because I had to pay MSRP for a CPO car with <5k on the clock.
Average price of a car is $48k or so at this point, so spending over $40k on any brand is just what people do now.
Inflation, baby.
I hear this number thrown about, but average isn’t helpful: if 2500 out of the 10000 sample drop the cash on a spec’d out car and another 2500 are carrying debt from previous cars, that’ll bias it upward in contrast to the non-morons who are hopefully more typical. Median or… mash? I guess.
Old debt isn’t factored into the purchase price – that’s the loan amount, which can be very different from the purchase price in both directions – so that’s not affecting the average.
I see. That’s uncomfortable but thanks.
Because Toyotas are well built cars and they last. But I still wouldn’t pay a markup for a Toyota, or any car really.
Two years ago I dropped $40K+ on a new Toyota. Why? Because if I’m going to spend $40K+ on a new car, I want to make damn well sure it lasts a long time.
Frankly, I’d also rather spend $40K on a Toyota I enjoy owning for 15 years than $25K on a Toyota I don’t enjoy owning for 15 years.
To each their own.
When I placed my order for my Defender in early 2020 I went in knowing I wasn’t going to get a deal on it but I wasn’t going to pay a mark up either. My order did get delayed enough that they changed my model year to 2021 but when all was said and done I waited around 8 months for my truck (I did stalk the shit out of the ship that was transporting my truck and watched it sail into Baltimore harbour). I still only paid $69k (although $78k all in with taxes, extended warranty and maintenance) for a P300 110 with Offroad package, winter package, towing package with advanced off road terrain response, rear eLSD and the upgraded climate system for the 3rd row.
Meanwhile, other people were walking onto a lot paying $10-$15k markups on similar trucks. It boggles the mind that people are so hooked on instant gratification that they’re willing to piss that amount of money away.
How have you liked the Defender? Have you taken it off-road much? Even without the mark-ups, a Defender seems like a good cross-shop with these Land Cruisers.
Currently have 37k miles on it and I’ve given the skid plates a thorough work out more than once. I take it on the beach fishing almost every other weekend during the summer and a few times during fall/winter when the Striped Bass run and the only real issue I’ve had was the TSB for A-Pillar noise.
Honestly it’s more comfortable than my dads old 300Tdi Defender (and from the factory, more capable in pretty much every way), anyone who says different either hasn’t spent more than an hour in the drivers seat of one or has super short legs. No risk of smashing my elbow on the door when turning the wheel anymore!
I had a chance to poke around one. They’re really cool, the interior is unlike anything else in the class and they have a real presence to them.
If you look closely, you’ll realize that the dashboard is a modern take on the Series IIa dashboard. A long shelf on the passengers side with a centre speedo cluster being replaced by the infotainment screen.
http://www.smays.com/wp-content/uploads/2017/06/Land-Rover-Series-2A-dash.jpg
This is destroying Toyota’s brand. We can use ourselves as an example. We went shopping for a small SUV last year. Gave a lot of brands a shot: Ford, Honda, Nissan, and then Toyota. The markups on the Rav4 were insane. It was going to be in excess of $50,000 out the door and this was for a non-hybrid, plain-jane model. We wound up buying a Subaru because it was priced at $28,000 and we paid around $32,000 after taxes. Fine. Simple. Done.
I now automatically expect anything Toyota makes to be grossly overpriced. That has tarnished my opinion of the brand despite knowing they make great stuff.
In August of 2023, my Niece and her Husband went shopping for a new car and they asked me for vehicle recommendations and I recommended the Toyota Corolla Hybrid. And they found one in stock at a local Toyota dealer which they test drove and loved it….but, love soon turned to hate and disgust when the dealer added a “Market Adjustment” of $5000.00 to a car that had an MSRP of $25,000.00.
The Toyota salesman told my Niece and her Husband that: “Toyota is trying to rebrand itself as an Luxury brand” I Told my Niece to leave the dealership and check out Hyundai’s lineup of Hybrid vehicles and so they did and they ended buying a Hyundai Elantra Hybrid at MSRP. They have owned it for 8 months now and are in love with it and haven’t had any issues with it thus far.
To Toyota: ( ͡⚆ ͜ʖ ͡⚆)╭∩╮
I like that the dealer is trying to use “Toyota is rebranding itself as luxury” in order to justify a $5k markup that wasn’t Toyota’s idea.
Anyway, good job Toyota dealer for making Hyundai dealers look good.
Someone gotta do it. Hyundai isn’t going to improve their image by themselves.
“Toyota is trying to rebrand itself as an Luxury brand”
I would have asked them, “Sooo, what does Lexus think of this strategy?”
Theoretical conversation with the Toyota Cock Roach, (Um.. salesman):
“Lexus? well we sell them too and we mark them up with $30.000.00 – $40,000.00 market adjustments.” 😉
Very similar for me earlier this year. Was looking at Highlander Hybrid AWD, but locally very, very scarce ( had to go 600+ miles away to start to see inventory) and uncomfortably above MSRP. It’s like Toyota isn’t selling hardly any HH-AWD anywhere but west coast, east coast and some parts north. Huge 1000 mile wide void in the middle of the county.
My other candidate for my money was a Subaru OB XT Ltd. I easily got $2500 off MSRP and had my choice of vehicles. I went with ‘more power’ option. Yeah, MPG is worse than a J-series Honda V6 in the city, but highway is pretty good when not too deep in boost.
When I think if Toyota now, I think “overpriced”. Not that they aren’t good vehicles, but with the prices being at MSRP or above in the current market leaves a bad taste. The RAV4 was available at MSRP, but the seats exacerbated my back pain and I needed more towing ability.
In 3 – 5 years I’ll be in the market again. Fingers crossed Toyota will be putting the Hybrid Max drivetrain in middle and lower trim level vehicles.
Interesting comments about the seats. I’m 5 ft 7 and found the interior and the seats to be cramped in the Rav4. That and now comfortable. My wife who’s 6 ft could barely stand it so on top of the price, it was not a great experience. Somehow the Subaru Crosstrek we bought which is smaller has more interior space and better seats. We got the “Sport” version. And since most of the driving is freeway, it averages out 35MPG. Not bad, not great but sort of reasonable.
I’m at a loss as to what they think will be their saving grace if they become the next GM. Do they think Mexican-built Chinese autos won’t eat their lunch if they keep pricing up? The attractant to Toyota is appliances not sports or luxury.
Of course….
A $21,000 markup on a mass produced vehicle is an intelligence test. If you pay the markup, you fail the test.
But year after year, people keep doing it! If it didn’t work, dealers woudn’t bother.
How are there so many people out there with more money than sense?
You Tube.
Unfortunately, there seems to be no shortage of people with more money than sense.
Good thing we don’t live in a world where there isn’t such massive, flagrant failures of the “education” system and scammers pushing elaborate scams captializing on those failures, that leads to stupid people believing the earth is flat and vaccines are satanic, and everyone can rationally navigate the economy to provide for themselves effectively.
If only I lived in that world.
As long as there are spoiled, impatient suckers willing to pay these outrageous markups there will be greedy ones lining up, eager to gouge the hell out of us all. Everybody loses except the few holders of the ever growing money piles.
An Australian wrote this. And, as an Australian, I cringe a little that an Australian had to write this. I’m not sure how to fix this but I’m sure that someone could. In the meantime, I will do my utmost to save DT from the Aztek.. Plymouth thing.
To those that participate in Dealer extortion, (by paying these “Market adjustments” ) An old phrase comes to mind: “A fool and his money are soon parted”.
Jokes on the schmuck that pays it
I have no outrage for this since I refuse to play the game. When the first stone-age Miatas appeared from the primordial ooze in late 1989, dealers were getting huge markups. I visited my local dealer, gave them my card, and told them to call me when they had my specifications for MSRP. In April 1990 I got the call, bought the car and all was well. It did not bother me in the least to wait 6 months while the bigger fools got their vehicles.
Love or hate Tesla/Rivian/etc., but at least the manufacturers selling direct to the consumer cuts out a lot of this bologna.
Not really, Tesla was jacking up prices at the same time dealers were most successful in getting markups, and has dropped them since.
I’m not the kind of person who finds a great deal of difference between the manufacturer gouging me or a dealer doing so.
The direct sales model also plays into the fact that Tesla prices are ridiculously volatile. Elon wakes up, sees “line go down”, and can decide to chop $5,000 off MSRP across the board. If you just bought your Tesla yesterday at the former MSRP, you’re now underwater. Congrats?
Far be it from me to defend Elon and Tesla here, but if I miss an 11% sale at Menards by one day, or more pertinently, miss the expiration of a factory incentive at a traditional OEM by one day, it sucks that someone else might have paid less than I did, but the question of whether I thought the price I paid at the time I bought was fair or not remains unchanged.
We just aren’t as used to car pricing being visible to everyone as we see with Tesla.
Is that even possible? I feel like the 11% thing is constantly ongoing. They’re like the REI of home improvement. 🙂
Pandemic Menards really was like this. 11% was constantly available basically from mid 2020 through 2021/early 2022 but more recently you gotta time it again.
Land Cruisers roam wild over on Catalina Island. Little tricky to track one down, wrangle it, then get it across the bridge. Really looking at about two weeks worth of work in the bush. I can see spending that kinda money if your busy. For the rest of us. Land Cruiser season opens in May. Just in time for the Wine Mixer.
The proverbial two-edged sword. If your website caters to loyal but smart(ass) readers be prepared to visit Catalina Island and eat shower spaghetti for a very long time.
I’m unsure if I should be reading this with Attenborough’s accent or Steve Irwin’s voice.
This is the norm for any desirable Toyota product. Their stupid allocation system is basically a wink and a nudge at dealerships to charge whatever they want. If you search for any popular or enthusiast oriented Toyota in a major metro area pretty much all of them are going to have markups. If you want one, you either need to bite the bullet (don’t do this) or get your name on a list and wait 6-12 months for a car that’s close enough to what you actually want.
My wife and I are already talking about getting our name down for a Highlander hybrid and we aren’t even planning on seriously looking for another year or two. Toyota could fix this problem easily but they don’t want to. The artificial or actual (they simply can’t build enough hybrids to meet demand) scarcity of many of their products is good for them, great for their dealerships, and terrible for the customer.
Then why buy one and support that? That is my question.
Unfortunately they make the best products for what we want. We want something with lots of space that’ll last for 10+ years without headaches that has a lesser environmental impact than a full ICE vehicle but isn’t a full BEV since we’ll need to do long trips in it. There really isn’t anything out there that’s better than a Highlander or Sienna hybrid for that.
CR-V hybrid
They can ask whatever they want, but until there’s real evidence people are paying $20K over, I’m skeptical.
This is a mass-market vehicle, not supply constrained in any way to my knowledge, and will shortly be available everywhere for MSRP or below.
Lots of dealers took big time baths on inventory trying to hold on to markups too long. That’s going to happen to them here too.
They remind me of the surveillance camera industry years ago. They would hoard equipment when it first came out in hopes of cornering the market. They maybe sold 10% of their inventory at ridiculous marked up prices. Eventually when everyone else got them in stock they had to unload their inventory for less than everyone else. Unsurprisingly the businesses who were run that way no longer exist.
I’ll wait ’til the next Toyotathon.
Meanwhile, all the YouTube pundits are yelling about how dealers can’t sell cars and inventories are piling up on auxiliary parking lots that dealers are forced to rent.
Dealers tasted the blood in the water for the past few years and now they can’t get that taste out of their mouths.
Depends on the dealer. Toyota dealers certainly aren’t doing that. Dodge/Jeep dealers might be.
But that is probably in part because a Jeep Wrangler somehow stickers for $60k now and people are asking “why am I buying this?”
This same thing happened for the first couple years of the new Bronco. Dealer adjustments of 50%, or more, over MSRP.
There is one particular Dealer that had to buy land adjoining their main lot to accommodate 100s of vehicles. not because they couldn’t sell them, but because they had so many orders due to them offering pricing under invoice. I had my Base delivered from there, all included, at less than $28k.
Meanwhile, those price-gouging dealers are sitting on inventory, now that Ford has bumped the price to move profits from Dealer adjustments to MSRP. Those dealers pushed the limit of supply and demand, corporate did the math to take their slice, and the customers come out on bottom again. Now, you can’t even get a Bronco at MSRP within $10k of what I paid at one of the few really good car dealerships out there.
I wonder how that $100k car note for a Tacoma is gonna sting in a year when the Whole Foods parking lot is crawling with them.
Ain’t no thing, just swap it out and add the negative equity on to the next one!
It’s the American way! 8 year loan on a depreciating vehicle? No problem because what could possibly go wrong.
Nothing will go wrong! It’s a great idea to build an economy off of working people over leveraging themselves with precarious amounts of debt while funneling as much as humanly possible to the top 1% of earners. It definitely hasn’t completely imploded in the recent past. We’ll be fine!
Absolutely fine! Nothing to worry about over here!
I’ll still never forget when I bought my Elantra and overhearing a couple coming into the Hyundai dealership wanting to trade in their 3 or 4 year old Rogue with almost no mileage (“we don’t really drive much since we live in Brooklyn”) that wasn’t paid off and take out a lease on a top of the line Santa Fe because “sometimes we need more space to carry things when we come out to Long island to visit family”. The reason for the lease is so they could afford the payments. The salesman actually tried to talk them out of doing such an idiotic thing. I don’t know the outcome but the woman was adamant about making the switch so they probably ended up with a Santa Fe.
I remember when I was looking at BMWs years ago some dude was meeting with a salesman next to me who said something along the lines of “your current payment is $1,400 and if you trade in your 2020 on this 2022 it’ll be $1,700”. My jaw literally hit the floor. Like, it broke my brain.
If you can’t technically afford to pay cash (I’m not saying you HAVE to pay cash, if interest rates are reasonable it’s often not the best idea) you can’t afford it. Shopping by monthly payment is a catastrophic mistake that’s normalized in our society for some reason. People also need to understand that when it comes to the super high end stuff actual rich people either pay cash and hold onto stuff long term (Porsche) or do short term leases (BMW) so they don’t take depreciation to the face.
The only people taking on 4 figure payments to own a depreciating asset are financially illiterate and likely can’t afford it. Why this shit is normal is beyond me and we need to call it out at every opportunity.
As with anything it all “depends”, if I take a loan at 2.75% because the $80k I could drop on a car is earning 3% or more then why the hell would I pay cash?
You wouldn’t and shouldn’t, but way too many people have internalized “DEBT = BAD” and “PAY CASH OR YOU CAN’T AFFORD IT” which are childish messages that are well tailored for financially illiterate people but not for anyone with a modicum of sense.
Affluent people use debt as a tool, as they should.
Debt sucks but it’s also one of the only ways to build wealth and credit. I’m not saying that you need to pay cash, but I do think whether or not you could afford to if you so desired is a good gauge of whether or not a vehicle is comfortably within your budget.
And you don’t need to remind me of how you gambled on your Viper and won. We’re more or less talking about the average buyer and crossovers here, not the specialized enthusiast products that we all swoon over.
Considering the vast majority of people who take out car loans pay them off on time without making news, I think it is incumbent on the “pay cash” brigade to explain why that is a problem.
I guess I just don’t see the current situation as needing radical change, or the average consumer as so uninformed that we as outsiders need to prescribe a solution for them.
To be fair I’m not really part of the pay cash brigade. My car is financed because I got a great interest rate. But like I said, I do think if you can technically pay cash for something it’s a good barometer for whether or not you can actually afford it. Maybe that’s dated/it’s definitely conservative, but when it comes to cars it makes sense to me personally.
Houses are a very, very different story but we won’t did into that here.
Sometimes I put my tinfoil hat on and think lack of even basic financial literacy classes in high school is intentional.
We don’t even need to reinvent the wheel. A couple of days that include these snippets would go a long way:
1). Higher interest rate=bad, even if your payment is lower
2). Don’t tie up a bunch of your money in depreciating assets
3). Investing comes with risks regardless of what the flashy commercials tell you
4). SAVE! FOR! RETIREMENT!
5). Here’s how to not completely bork your credit!
6). Just because you can doesn’t mean you should
7). The long term payoffs are exponentially better than whatever the instant gratification is
8). The hot new get rich quick scheme will come and go very fast and be replaced by another, comparably stupid one
Fake news, that is not how I ended up with multiple British vehicles in my driveway and garage!
0. Here’s a thing called compound interest, let me show you it
“ which are childish messages that are well tailored for financially illiterate people but not for anyone with a modicum of sense.”
For someone who is truly financially illiterate, paying cash IS probably the best move.
I agree, that’s why I mentioned that when interest rates are favorable financing can be a better move than buying outright. If you want a new BEV right now leasing is the best option. It indeed “depends”.
I play a slight variation of the same game. My current lease is a hair over $1000 and it lets the manufacturer take on the risk of depreciation. If the car depreciates more than they factored in the deal, it’s their problem. If it goes the other way around, I sell the leased car to CarMax and pocket the $$$$. That’s exactly what I did when Covid hit and the used car market went haywire.
So if the finances work out, why not?
Exactly this. My boss leases. His payment is currently $799 a month. It’s a company car so just wash, rinse, repeat every 3 years.
We’ll fix it by setting interest rates near zero! Then everyone can get a car mortgage and the economy will keep humming along without a-
OH CRAP OH CRAP OH CRAP INFLATION RIGHT UP MY BUNGHOLE
Higher interest rates will fix this! The economy doesn’t need people to buy stuff!
Household debt payments as a percentage of disposable income are well below historic averages.
https://fred.stlouisfed.org/series/TDSP
Well, in the US the suckers are stupid enough to vote for two parties who want to fight over who is deserving of consideration as people (“make ‘people’ a bigger group and include even those weird people! No, smaller, you woke communicrazy! The weirdoes are weird, kill em all instead!”) and pick sides based on that instead of so expect more of the same.
After all, it’s not like anyone who actually mattered wasn’t made whole after ’08.
Fuck every single car dealer out there (okay, I am sure there are like 2-5% of them that don’t suck). And a super fuck you to the politicians protecting them with protectionist laws.
Yeah the politicians in my state, “FrEe mArKeT”. Then they protect these clowns by not allowing direct sales. What a joke.