Latest News Toyota discounts US used-car financing - 30/05/2008 Toyota has begun offering cut-rate financing for the first time on used vehicles across the US, underscoring the widening crisis in the motor industry, especially in the fuel-thirsty sport-utility vehicle and pick-up truck segments. The Japanese carmaker said that buyers of used Sequoia SUVs and Tundra pick-ups would now pay an interest rate of 2.9 per cent for up to five-and-a-half years, compared with current financing charges of 5.3 per cent to 8.4 per cent, depending on credit risk. General Motors launched similar deals last month to boost sales of its big SUVs as well as some cars. The promotions are evidence of how malaise in the new vehicle market is rippling through to the used-car segment. Several non-US companies, including Toyota, have warned in recent months that the slump in the US, the world’s biggest vehicle market, will hit overall profits. Big SUVs and pick-ups are among the manufacturers’ most profitable models. Carmakers have become increasingly active in supporting their dealers’ used-car business through “certified pre-owned” programmes, offering reconditioned vehicles with limited warranties. The vehicles typically come either from car-rental operators and other fleet owners or, in the case of Toyota, from trade-ins. “We’re seeing a lot of people bringing in their large vehicles and trading them in for smaller cars,” said Brian Sciumbato, Toyota’s national used-vehicle manager. According to Adesa, an Indianapolis-based car auction group, the average wholesale price of a used full-size SUV tumbled by 11.8 per cent in the year to April. Prices for big pick-ups are down by 15 per cent. CNW, a market research firm, estimates that used SUVs sat on dealer lots for an average of 66 days last month, versus 49 days in April 2007. Carmakers are also offering more generous incentives on new SUVs and pick-ups in a bid to boost flagging sales. New Sequoia sales were more than a third lower in April than a year earlier. Tundra sales were down by 6 per cent. The average petrol price in the US climbed to a record $3.94 a gallon on Wednesday, up 23 per cent from a year earlier, according to the AAA motoring organisation. Even so, Tom Kontos, Adesa’s chief economist, calculates that the drop in prices of used SUVs and pick-ups more than offsets the surging cost of filling them up. “Even with high fuel prices, you’ve got a chance to grab a bargain right now,” Mr Kontos said. FT |
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