Toyota dealer Adam Simms wants used cars and trucks to certify. If those vehicles don't come to his dealership as trade-ins, dealership employees will go to the vehicles.
Simms is dealer principal of Toyota Sunnyvale in Sunnyvale, Calif. Every week, his store's buyers visit the homes of about 30 consumers to appraise vehicles advertised for sale. They buy about half, Simms says.
The number of off-lease vehicles handled by Toyota Financial Services is down. So Toyota dealers such as Simms must work harder to find certifiable used vehicles.
85,000 miles is limit
To be eligible for certification by Toyota, vehicles must be no more than seven model years old and have fewer than 85,000 miles.
Off-lease vehicles generally are ideal candidates for certification. They typically are about 3 years old, have been driven less than 36,000 miles and are in top condition.
Off-lease cars and trucks make up about 25 percent of the vehicles sold by Toyota Certified, says Norm Olson, the program's sales operations manager.
Olson says off-lease vehicles "are not supplying what we need, by any means."
"The majority of the certified cars are from trade-ins," Olson told Automotive News. "Our dealers have become very aggressive in that area, knowing that they are difficult to find."
Toyota Financial spokeswoman Karen Ideno would not say how many off-lease vehicles the captive finance company expects to remarket this year.
She says the company's sales of off-lease vehicles declined 30 percent in 2005 from 2004.
This year, Ideno says, Toyota Financial projects a 10 percent increase in off-lease sales over 2005. But even if that happens, Olson says, Toyota dealers will have a tough time finding enough vehicles to certify.
Leasing was popular in the late 1990s. But automakers cut back in the early 2000s, when off-lease cars and trucks flooded the market and depressed used-vehicle values.
CNW Marketing Research, of Bandon, Ore., estimates that leases on 2.15 million vehicles are expiring this year. That's down about 11.1 percent from last year, CNW says.
A spokeswoman for General Motors Acceptance Corp. says fewer GM vehicles are coming off lease this year than last year. She would not disclose figures.
GM Certified manager Paul Pejza told Automotive News that 25 to 30 percent of eligible GM vehicles get certified.
Beating the bushes
Dealer Simms says he assigns two employees to look for Toyota vehicles offered for sale by private owners. They scour consumer Web sites such as craigslist.com, AutoTrader.com, and cars.com. They also review newspaper ads.
Simms says the private sellers are often receptive because the store handles sales paperwork required by the California Department of Motor Vehicles.
Working with the dealership also eliminates a seller's need to deal with strangers, he says.
"The supply of used cars from the for-sale-by-owner community is better than it has ever been," Simms says.
Toyota Division increased its certified sales 10.3 percent last month over July 2005. Toyota was the top-selling certified brand last month, beating Chevrolet by 1,769 vehicles.
For the first seven months of 2006, Toyota Division certified sales rose 9.4 percent over the year-ago period.
Chevrolet's certified sales were down 21.6 percent in July compared with the year-ago month. From January through July, sales of certified Chevrolet vehicles rose 5.7 percent over the same period a year ago.
Overall, the industry sold 137,036 certified used vehicles in July. That was down 5.8 percent from the year-ago month.
The industry sold 971,409 certified vehicles in the first seven months of 2006, up 1.6 percent from the year-ago period.
You may e-mail Arlena Sawyers at [email protected]