The customer can switch out of the car at the end of the term into another Toyota-financed car.
Is it a deal too good to be true - or has Toyota nailed the resale value of its cars?
Its latest car finance deal guarantees the resale value of the car when the loan term ends. Called Toyota Access, it is claimed to be an affordable and flexible way to buy a new car.
It works as a standard loan with Toyota Finance but the zinger is the zero - that's 0 - per cent finance rate on the Australian-built models: Camry, Camry Hybrid and Aurion. The comparative interest rate on other Toyota models is only 1.9 per cent.
At the end of the three year loan term, and after paying a set monthly repayment, there is a “guaranteed future value”. This amount is similar to a balloon payment on any lease. The difference is that Toyota guarantees - before the customer enters the contract - to buy the car back at that price.
In the attached example, the Toyota Camry Altise costs $28,998 including on-road costs in NSW. This price may change dependent on price differences and the state where the car is registered. The guaranteed buy-back is $11,824 in this example - dependent on the car's condition and distance travelled.
This compares with the 48 per cent industry residual value of the Altise after three years which is estimated at $13,920 - a figure that may apply if the customer chooses to sell the car privately. That indicates that the car may sell for more than what Toyota wants back, so the difference may end up in the customer's pocket.
But a few extra dollars at the end of the deal may not be the only attraction. It's also flexible. The customer can switch out of the car at the end of the term into another Toyota-financed car and if - as the example here - the old car is worth more than the guaranteed future value (GFV). Or the car can be handed back to the Toyota dealer - probably without incurring a cost - or the customer can pay the GFV and own the car outright. In this case, the car could be sold privately and they could then pocket the difference.
Along the way, the car is covered by Toyota's capped-price service program so the customer has a predictable thread of costs for the ownership of the vehicle. Toyota Australia's executive director sales and marketing Matthew Callachor says Toyota Access is available on all new Toyota vehicles. “It guarantees that the resale value of the Toyota will never be less than the final payment, totally removing any risk of being out of pocket,” he says.
The monthly repayments are fixed and dependent on the vehicle chosen and its driveaway price. “Customers may be able to upgrade their choice of vehicle, or add extras like accessories and even purchase a brand-new model more often,'' Mr Callachor says.
“One of the great concerns highlighted by our customer surveys is that, at the end of the finance term, the amount owing might be more than the value of the car. With Toyota Access, we have set out to eradicate that concern.” He says the program appeals to owners who want the flexibility to update their Toyota to suit their changing circumstances.
If, for example, a customer wants a bigger Toyota as their family grows, they can update more easily,” he says. “For most people, family planning and financial planning go hand in glove. Until now car finance hasn't necessarily been part of that consideration. Now it can be.''
Toyota Access on a Camry Altise:
- Drive-away Price - $28,990 (NSW example and price may be slightly different for other states)
- Amount Borrowed - $28,998 (there is a $7.50 “security registration fee”)
- Comparison Rate - 0%
- Loan Term - 36 months
- Minimum Guaranteed Future Value - $11,824 (conditions regarding distance travelled and vehicle condition will apply)
- Monthly Finance Repayment - $491