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04 Subaru STi
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Toyota is taking Honda's Insight threat seriously … very seriously. In fact, the world's largest automaker will price the new (third-generation) Prius directly in competition with the Honda's Insight in the Japanese market.

Set to go on sale on May 18th, the new Prius will cost just $20,750 (2.05 million yen). The number isn't official from Toyota, but that is the price that dealerships have been given.

The Insight has a starting MSRP of $20,470 ($19,800 before delivery), which is well below the expected Prius price of $24,000.

If the Prius does in fact get it's U.S. pricing set at just over $20,000, it will be an attractive package as it is not only a larger vehicle than the Insight (with more interior room) but it also gets significantly better fuel mileage with 51/48 mpg (city/highway) compared to the Insight at 40/43.

Higher trim levels of the Prius will, however, raise the price significantly with the top level model coming in at 3.27 million yen (or $33,100). The fully-loaded Insight, on the other hand, will still only cost 2.21 million yen (or $22,370) in Japan.

Meanwhile Toyota, which has sad that it will keep selling the current Prius model in Japan, is discounting its MSRP to 1.89 million yen ( or $19,130).

More: New Prius Takes On Insight With $20,000 Starting Price on
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