Toyota Financial Services used the Internet to move 40 percent of the off-lease vehicles it sold Toyota dealerships in the fiscal year that ended March 31. That's twice the share of online sales the finance company recorded in the previous 12 months.
The figures offer further evidence that direct online sales by remarketers to dealerships are challenging physical vehicle auctions. Dealerships that buy vehicles online often see big cost savings, as do sellers.
Toyota Financial has sold more than 50,000 off-lease vehicles to dealerships through its online auction channel over the past two years, says National Remarketing Manager Carl Scandura.
Scandura would not say how many vehicles leased by Toyota Financial will come off-lease in 2005. CNW Marketing/Research Inc. of Bandon, Ore., estimates that 104,825 of the captive finance company's leased vehicles will come off-lease this year, up from about 102,000 in 2004.
Toyota Financial's Web auction channel, Toyota Dealer Direct, launched nationwide in June 2003. Last year, it added a second daily online auction.
A study by Emercent Solutions LLC, an auto finance consulting firm in Chicago, concluded that unit sales at traditional vehicle auctions fell by 6 percent last year from 2003. But unit sales through dealer-only online auctions grew by 3 percent, the study said.
Buyer's fees charged by traditional auctions can range from $150 to $250 per vehicle, Scandura says. Dealer Direct does not charge dealerships to use the service. Dealerships that buy online also save time and travel expenses, Scandura says. Factories save money because they do not have to ship vehicles to traditional auctions, he adds.
Bill Blume, used-car buyer at Michaels Toyota in Bellevue, Wash., says he buys about a vehicle a day on Dealer Direct.
Blume says the quality of the vehicles he buys online generally is higher than what he finds at traditional auctions.
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