Seven of Ten Toyotas Sold in March Had 0-Percent FinancingBy Bill Visnic April 20, 2010
Toyota Motor Corp.'s reputation may have taken a whack in recent months, but those troubles apparently are nothing a good deal couldn't make buyers forget.
According to data released today by Edmunds.com, parent of AutoObserver, a remarkable 71 percent of all Toyotas sold last month were financed through a 0-percent loans. Battling the tide of negative publicity surrounding a string of recalls related to unintended acceleration, Toyota in March took the uncommon step of offering 0-percent loans for as much as 60 months on even its most popular models - including, at least in some markets, the Prius hybrid-electric vehicle.
As Toyota's unintended-acceleration controversy abated, the company ratcheted back on its heaviest incentives, but its March blow-out led the entire industry to its biggest 0-percent financing penetration rate since Edmunds.com began compiling the data six years ago.
Some 22 percent of all new-vehicle financing loans were 0-percent APR deals in March, Edmunds analysts said, exceeding the 21-percent figure of July, 2006.
Surprisingly, Mazda North American Operations was second to Toyota in the ratio of 0-APR financing in March, with 58 percent of all new-vehicle purchased under 0-percent deals. Ford Motor Co.'s Mercury unit was third, with 32 percent of all new-vehicle purchased financed via a 0-percent interest loan.
It's a signal money for lending may be more available - and that automakers are desperate to stoke meager flames of recovery, despite what are said to be much more attractive industry-wide inventory levels.
"Credit must be starting to loosen if almost a quarter of all transactions financed in March were approved for zero-percent financing," said Jessica Caldwell, senior analyst for Edmunds.com. "Certainly it seems as if Toyota Motor Credit and other 'captive' finance companies may have lowered standards to help improve sales." - Bill Visnic, senior editor