Toyota Offers Discount Loans, Leases to Lure Back U.S. Buyers
Toyota Motor Corp. will offer incentives including no-interest loans and discounted leases to win back buyers as the world’s largest carmaker tries to offset a U.S. sales slump amid record vehicle recalls, Bloomberg reported.
Toyota buyers can choose either a loan with no interest for as long as five years or a low-cost lease on models including Camry, Corolla, Matrix, Prius and Yaris cars, Venza wagons, RAV4 and Highlander sport-utility vehicles and Tundra pickups, Bob Carter, group vice president of U.S. sales, said. Toyota owners who buy a new vehicle also get two years of free maintenance.
Toyota is introducing the low-cost offers as the Toyota City, Japan-based company battles to regain sales after recalling more than 8.5 million vehicles worldwide to fix flaws ranging from unintended acceleration to braking software. The carmaker reported an 8.7 percent U.S. sales decline in February.
The move may lead competitors including General Motors Co. to offer similar enticements and spark a “breakdown in industry pricing discipline,” said Brian Johnson, a Barclays Capital analyst in Chicago. “These expensive programs should represent a material step up in cost of incentives,” he said in a research report.
Subsidizing a zero-percent, 60-month offer will cost about $4,657 over the life of an average car loan at current auto-loan interest rates, Johnson said. Toyota currently spends about $1,600 in incentives per vehicle while GM averages about $3,000, he said.
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