Wear and Tear Lease Protection Policy? Toyota Financial Thinks So
Tim Esterdahl | Jan 09, 2012 | Comments 2
Toyota Financial Services (TFS) will introduce a wear and tear lease protection policy in the first quarter of 2012. The move is part of a larger plan to increase the popularity of leasing of Toyota products. There has been confirmation the policy is being developed and there is no precise timetable for its release.
Toyota Financial is working on a new wear and tear lease protection policy to increase leasing sales in the 2012.
The idea behind the policy is to get customers to lease again in the future by reducing any liability at the time the lease ends. For example, under the current policy, if a vehicle is returned from lease with a cracked windshield, the owner may be asked to pay for a replacement. With Toyota’s new wear and tear policy, any number of items – from cracked windshields to minor dings and dents to worn tires – will all be “forgiven” at least termination.
Mercedes Benz and Ford already offer similar policies for their leased products, and the thinking here is that Toyota leases will become more competitive if TFS offers this product.
Experian Automotive recently released data that suggests Toyota products are residually competitive, but are performing below industry standards when it comes to leasing. The data, released in the third quarter of 2011, stated the Toyota Camry model’s residual value was 36.8 percent of the original sticker price. This put it close to the numbers of the Honda Accord at 37.8 percent and the Nissan Altima at 37.2 percent.
Overall, lease penetration for the Toyota brand in the third quarter was 21 percent. This was down from 29.1 percent in the same time period in 2010. Lease penetration is a key metric for any automaker because it facilitates repeat purchases and strengthens the automakers certified used vehicle programs…which in turn boost resale values, which in turn drive new vehicle sales, etc.
Leasing – at least as far as the automakers are concerned – is a very good thing. Hopefully, TFS will be able to increase the popularity of leasing.
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Filed Under: Auto News
oh, i am so late to this article.
Toyota and Lexus dealers asked the captive finance company to come up with its own lease protection product.
Toyota Financial Services already offers a few other branded products, including extended-service contracts; guaranteed asset protection, or GAP; and credit life insurance.
Mike T ,
its ok , you are not too late to this article. LOL