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Air filter box, left-center of engine compartment.
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The catches you need to release are circled. Looking at them, it's pretty obvious what you need to do to release them.
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Pivot the cover up towards the rear of the car, and you'll see the factory air filter, here partially removed to show that the gasket covers the entire
airbox, including the right side chamber.
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The K&N air filter (part # 33-2186, same as the 1G Prius - available at most autoparts stores, and even on Amazon when searching for 332186) next to the stock one. Note that the K&N does not have the gasket on the right side.
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Place the K&N in the airbox, and you see you really need to seal the right side. Note the K&N goes in tab side down as noted in the instruction sheet with it.
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Peel the factory air filter gasket away from the air filter, as shown.
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A closeup of the cut - notice that the cut goes halfway through the surround that fit around the factory air filter.
You may want to leave more on the right side of the gasket on the first cut to make sure it is tight against the gasket, but this
worked fine for me, pressing tightly to the K&N filter.
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Fit the right side of the cut gasket to the right side of the airbox, then insert the K&N filter.
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Replace the airbox lid, and make sure to install the K&N sticker - that way, if your dealership ignores it and tosses the filter,
you can point to the sticker and tell them they owe you a new K&N filter.
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