Toyota Offers Cash-Back Rebate on Prius

Posted: January 20, 2009

It is, perhaps, the final sign that the automotive apocalypse is upon us: a cash-back offer on the Toyota Prius. Granted, it isn't much of an offer -- a $750 rebate. But when auto sales crashed in 2008, the Prius seemed immune.

But the current sales drop affects every model, and Toyota's previous incentives haven't brought the company's sales back to normal levels. Jalopnik notes, "Toyota wasn't Saved By Zero but rather imperiled by a 36.7percent drop [in sales] in December 2008. Instead of focusing on 0 percent financing, Toyota is going to put more money on the barrel," using cash-back rebates instead of financing to lure new customers into showrooms."

Toyota may have made this move hoping that cash rebates will lure more customers than 0 percent financing, but from the buyer's standpoint, interest-free financing often beats a cash rebate in the long run.

This round of rebates will include the $750 offer on the 2009 Prius - which, we should note will be replaced with an all-new 2010 model that is larger, faster off the line, and achieves better gas mileage.

Toyota hasn't offered an incentive on the Prius in more than a year. At one point, during a summer of $4 gas, they were selling almost as fast as Toyota could unload shipments of the new cars, which are built only in Japan -- Toyota had less than a two-day supply of the cars in North America. That meant dealers could sell the Prius for full price, confident that if they passed on a customer who wanted to pay less, a buyer customer willing to pay full price would appear soon.

Dealers in some areas are offering their own discounts beyond what Toyota has offered. Automotive News reports that Florida dealer Earl Stewart "has been offering his own cash rebates of $2,000 on the top-of-the line Prius and $1,200 on the base model." Stewart tells AN, "It's no longer a seller's market for the Prius. We need to treat the Prius like a Camry."

That Camry, by the way, is also less expensive now. The non-hybrid version now carries up to $1,500 in rebates. The Corolla carries the same. Slower-selling models like the Tundra full-size truck carry up to $4,000 rebates. This incentive program ends February 2.

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