The Car Hub

News out this morning of Japanese carmaker Toyota launching a price busting leasing deal which has shaken the car market in general and also the car leasing companies.
Toyota are offering a well equipped new Toyota Corolla model on lease for 3 years at only $189 per month, at present this deal is only available in the USA and there is no information as to whether it will be rolled out elsewhere.
This deal has raised the question within the motor industry as to the financial standing of the Toyota company, are they in financial distress and being forced into this option in order to move their new cars?
However US car dealers are expecting a bonanza in leasing the Corolla out to customers as the deal has been described there “as the best motoring option so far”.
Toyota state they have calculated the resale value of the returned Corollas at the end of the 3 year lease as being 63% retained value on new, even allowing for 12,000 miles per annum usage. Experts in the US have quoted a more realistic estimate at 53% retained value which equates to a $1800 difference.
Here in the UK if a similar car were to be assessed for its retained value it would be estimated to be nearer the 45% mark.
In both the above cases it would seem that Toyota have miscalculated the resale value of the leased cars that they could recoup after the 3year leasing period.
So have Toyota pointed the gun at their own feet? It’s going to be a long 3 years for them to await the results and if the take-up on the leasing offer is good, as it should be providing there are no hidden conditions, then it really is a make-or break result.
Meantime the rest of the motoring world should be knocking on Toyota dealership doors to find out there local availability.
Bill Williams