LOS ANGELES -- Toyota is supporting U.S. dealers by launching an array of incentives and financial aid to combat thinning vehicle inventories due to Japan's earthquake.
"These incentives are there to help dealers maintain their profitability," said Toyota Financial Services spokesman Justin Leach. They mirror efforts made to support retailers during the automaker's recall crisis in early 2010, he said.
Toyota said last week that full assembly rates may not return until at least November, with many plants operating at 50 percent capacity or below in the interim.
According to an e-mail sent to dealers Tuesday by Toyota Financial Services and confirmed by Leach, the dealership aid programs include:
• Lowering Toyota Financial's borrowing rate for dealers of Tier 1 (prime) and Tier 1+ new-car loans by new 50 basis points for the next 60 days.
• Offering 2.9 percent annual percentage rate financing on all Tier 1 and Tier 1+ certified-used vehicles for the next 60 days.
• Raising residual values on all 2011 Toyota and Scion models by 2 percentage points for the next 120 days.
• Allowing dealers to borrow up to 130 percent -- up from 120 percent -- of a new car's value to allow a customer to cover fees, service agreements or an upside-down trade-in.
• Allowing Toyota and Lexus dealers to increase some lines of credit by up to 50 percent. This incentive is only available to dealers who floorplan with Toyota.
• Providing lease extensions for customers for up to 12 months, in six-month increments.
• Suspending payments of principal on Toyota Financial-financed real estate loans for Toyota and Lexus dealers. Interest payments are still required.
• Making it easier for dealers to qualify customers in vehicle service agreements on new car sales.
• Changing insurance product participation program volume qualifiers
• Rewarding dealers by making it easier to earn incentive trips.
Toyota also is becoming more aggressive in the used-car market by offering vehicles through closed auction for two weekends instead of one.
Additionally, if a dealer buys a car through Toyota's "Dealer Direct" auction program, and the car does not sell within 60 days, Toyota will buy the vehicle back for 100 percent of the purchase price, Leach said.
Toyota is pushing fleet customers to return vehicles, to give a larger used pool for its dealers to choose from.
The automaker had a 52-day supply of Toyota/Scion models on April 1 and a 37-day supply of Lexus models.