BOSTON -- Toyota Financial Services is testing a program that offers off-lease vehicles for sale to dealers outside its franchise network while the vehicles are still sitting on the lots of Toyota and Lexus dealers that accepted the vehicles.
Until recently, other dealers didn't get an opportunity to buy those vehicles until the cars and trucks reached a physical auction. But now, independent dealers and dealers representing other brands can bid on the vehicles via ADESA's DealerBlock online venue.
The advantage for Toyota Financial is it doesn't have to pay transportation costs to move those vehicles to a physical auction if the vehicles sell while on dealers' lots, said Mike Reid, Toyota Financial's national remarketing manager.
As always, Toyota's dealers get first shot at those vehicles -- in online auctions -- before they are offered to other dealers, Reid said.
"We didn't take anything away from our franchise dealers. They still have every opportunity to buy the cars," Reid told Automotive News during the National Auto Auction Association conference here in September.
"But for anything that doesn't sell" in online auctions open only to Toyota's franchised dealers, "we have open sales opportunities for other dealers to come in and buy vehicles.
"Every vehicle we sell upstream is a vehicle we save transportation expense on."
Toyota Financial sells "north of 80 percent" of its vehicles to dealers online, up from 20 percent in 2008, Reid said.
Reid said Toyota Financial began the national pilot program in May. He said it has been largely successful with no problems for franchised dealers. But he said the company hopes to increase its sales with marketing initiatives to boost awareness among dealers outside its network. It also wants to see how the program performs during the fall and winter.
Reid said: "We'll make an assessment at the beginning of next year to see if it is something we want to continue with -- but so far, so good."