Print
Respond to Editor
ReprintsToyota Financial looks to boost leasing with wear-and-tear product
Toyota Financial Services expects to launch wear-and-tear lease protection policies early in 2012 as part of an overall strategy to increase lease penetration, according to retailer interviews.
A TFS spokesman confirmed that the new F&I product was in development, but he did not provide details of the policies or the timing.
Jim Giddings, general manager of Lustine Toyota in Woodbridge, Va., said a Toyota-branded wear-and-tear product would be helpful.
"If you've got a ding or a crack in your windshield, you can take a happy customer who's normally all set to turn around and lease from the same dealer again and turn them off, if they have a big charge at the end of the lease," he said.
Giddings said the Toyota brand is a competitive advantage for selling F&I products.
Other captive finance companies offer branded wear-and-tear protection policies on leases, such as Ford Credit WearCare or First Class Lease Protection from Mercedes-Benz Financial Services.
According to data from Experian Automotive, Toyota products have competitive residual values, but lease penetration for the Toyota brand was below industry average.
In its third-quarter report, Experian said the Toyota Camry had an estimated 48-month residual value of 36.8 percent of sticker price, roughly on a par with 37.8 percent for the Honda Accord and 37.2 percent for the Nissan Altima.
Toyota lease penetration was 21 percent in the third quarter, the data said.A year earlier, it was 29.1 percent.
You can reach Jim Henry at autonews@crain.com.
