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It's not a good time to sell your Toyota RAV4. 

Those who purchased a used Toyota RAV4 in 2022 were hit hard by the inflated prices caused by car shortages. Now, as they attempt to sell their cars, they are facing a significant financial blow. 

Bethany Simko (@bethanyysimko) purchased her 2109 Toyota RAV4 from a Toyota dealer for $36,000, and now she has to sell it because she's moving from Hawaii back to the mainland to Los Angeles, California. When she went to the same dealer that sold her the car, they are telling her it’s now worth less than half of what she had paid just two years ago. 

Bethany on her TikTok clip says,

"I'm moving from Hawaii to LA, and I need to sell my 2019 Toyota RAV4. Now the Toyota dealer tells me it's worth $17,000 less in only two years?" she says in disbelief. “What's up with Toyota?"

Imagine moving to Hawaii because you are a fitness trainer. You are single, nothing can hold you back from doing what you love, and it's a good time to escape the craziness on the mainland during COVID in 2022. 

You make the move to the big island and purchase a two-year-old 2019 Toyota RAV4. However, used car prices skyrocketed because of supply chain issues and new car shortages. You had to pay $36,000 because so few cars were available. But you love the car, and you buy it.

Fast Forward Two Years

Now, just two years later, the car is only worth $22,000, but the Toyota dealer will only give you $19,000 because prices on the RAV4 have dropped significantly. 

This drop in value can be attributed to the end of the 2021 car shortage, which has led to a more balanced supply and demand situation in the used car market. 

Bethany says, "I'm moving in five days and don't have time to put my RAV4 on Marketplace. I still owe $22,000 on it, but I have to sell it now. I know that selling it to the dealer is much easier than selling it myself."

Bethany Takes Her RAV4 to the dealer 

"My RAV4 is my baby; I paid $36,000 for it. They better give me a good offer," she says with indignation. 

As she waits for the dealer to check the car over and inspect it, she says, "They better handle my car nicely." Now, after the dealer tells her the car is worth $24,000 retail, they can only offer her $19,000 wholesale for her SUV. 

She tells the dealer she can't take that amount for her car, So she's able to negotiate with the dealer, and they tell her they can only go up to another $1,000. She tells them it's unacceptable and she will take it somewhere else.

What will the Lexus dealer offer?

So now she goes across the street to the Lexus dealer to see if she can get a better offer from them. However, the Lexus dealer tells her the best they can do is $19,000. 

Now she goes back to the Toyota dealer, and they say the highest they can go is $20,500. It's their best and final offer. 

Bethany checks what a 2019 Toyota RAV4 is selling for now, and her RAV4 XLE is retailing at the Toyota dealer for $26,000 on the island of Hawaii. 

What should Bethany do?

If Bethany sold her RAV4 by herself on Marketplace, she could likely get $22,000 for her car. That's what she still owes. However, in 5 days she is moving and doesn't have time to sell it herself. 

Her best option now is to take $20,000 from the Toyota dealer, but she has to pay the bank an additional $1,500 to pay off her car loan.  

Bethany says, "I'm probably going to take that offer of $20,500. We'll see."

What Should RAV4 Sellers Do If They Purchased Their Cars During the Car Shortages?

If you bought a car during the 2021 shortage, consider keeping it until it's paid off, as used car prices are still high, and the market may not be as favorable for selling or trading in. 

Here's a more detailed breakdown from Kelley Blue Book of what car owners who purchased during the 2021 shortage should consider:

1. Hold onto your vehicle if possible:

• High Used Car Prices: The car shortage led to a surge in used car prices and trade-in values, but now values have dropped. 
• Potential for Negative Equity: If you financed your car, you might have negative equity (owe more than the car is worth) due to the inflated prices during the shortage. 
• Consider Keeping Your Car: If you can manage the payments, holding onto the car until it's fully paid off could be a wise financial move, given the current market conditions for selling or trading in. 

2. If you must trade in or sell:

• Research the Market: Before trading in or selling, research the current market value of your vehicle and compare quotes from different dealerships and online car buyers. 
• Be ready to negotiate strategically. Remember, dealerships are well aware of the current value of your used car, so don't be afraid to push for a fair deal. 
• Consider Private Sale: Selling privately can sometimes yield a higher price but requires more effort and time. 

3. Maintenance and Repairs:

• Regular Maintenance: Ensure your car is well-maintained to extend its lifespan and potentially increase its trade-in value.
• Address Repairs Promptly: Don't delay addressing necessary repairs, as neglected issues can depreciate the value of your vehicle. 

4. Future Car Purchases:

• Be Flexible: If you're in the market for a new car, be prepared to be flexible with your preferences, as certain models or features may be harder to find. 
• Shop Around: Don't settle for the first car you see, as other options may be available. 
• Consider Used Cars: The used car market may still be competitive, but there could be opportunities to find a good deal. 

Conclusion and Questions for RAV4 Owners:

Toyota RAV4 owners and others who bought used cars during the inflated market in 2022 are now paying again. 

Bethany purchased her 2019 Toyota RAV4 at the worst time, during the height of the new car shortages. Used car prices skyrocketed, and buyers had to pay exorbitant prices. 

The Toyota dealer can now only pay her the wholesale price for what her car is worth. She doesn't have time to sell the car, so now she will take an even bigger hit.  

Bethany’s experience with her Toyota RAV4 isn’t unique: many car owners have faced unexpected depreciation, but some are dealing with the flip side of vehicle ownership: battery degradation in EVs. Take, for example, a Tesla Model 3 owner who, after 55,000 miles, still loves the car but is grappling with a significant drop in range, now getting only 145 miles on a full charge. While gas-powered cars like the RAV4 lose value through depreciation, EVs introduce a new concern: how much range they retain over time. If you’re considering an electric vehicle, understanding long-term battery performance is just as crucial as tracking resale values. Read more about this Tesla owner's experience here: 55,000 Miles In, I Absolutely Love My Tesla Model 3—But I’m Only Getting 145 Miles on a Full Charge.

How About You?

Did you buy a used Toyota RAV4 or another vehicle during COVID in 2021 and 2022? If so, click the red Add New Comment link below and let us know.

Check out my Toyota RAV4 story: I Paid Too Much For My 2024 Toyota RAV4 Because the Dealer Stung Me By Issuing a Verbally Undisclosed Credit Card For an Extra $1,500 Down Payment

I am Denis Flierl, a Senior Torque News Reporter since 2012. My 30+ year tenure in the automotive industry, initially in a consulting role with every major car brand and later as a freelance journalist test-driving new vehicles, has equipped me with a wealth of knowledge. I specialize in reporting the latest automotive news and providing expert analysis on Subaru, which you'll find here, ensuring that you, as a reader, are always well-informed and up-to-date. Follow me on my X SubaruReport, All Subaru, WRXSTI, @DenisFlierl, Facebook, and Instagram.

Photo credit: Denis Flierl via Bethany