Toyota Recall Models Back on Sale, but at What Price? Edmunds.com Guides Shoppers on Toyota Discounts

Toyota Recall Models Back on Sale, but at What Price? Edmunds.com Guides Shoppers on Toyota Discounts

SANTA MONICA, Calif. — February 5, 2010 — The Toyota throttle fix is currently underway, and the recalled models are returning to sale. Meanwhile, the Prius brake problem is making headline news. What discounts can shoppers expect given the damage to the Toyota brand?

For New Car Shoppers"As Toyota's image slides under a shadow, a shopper might get a great deal on a new car. When foot traffic on dealership lots is down, the prices also go down. In negotiations, one can create leverage to get a lower price by expressing concern over the safety issue in the recall," advised Edmunds.com Senior Consumer Advice Editor Philip Reed in his article Shopping for a Toyota During the Recalls at http://blogs.edmunds.com/strategies/2010/01/savvy-shopper-shopping-for-a-toyota-during-the-recalls.html.

Edmunds.com analysts expect that Toyota will offer consumers goodwill incentives to rebuild relationships with customers. These incentives will likely cover all models and be advertised with a corporate message intended to re-instill trust in the brand.

Despite news of the Toyota Prius brake problem, Edmunds.com analysts anticipate that Prius values will fall only slightly in the short term. The transaction prices of the Toyota recall models might be affected even less.

"It's counterintuitive, but one of the unintended consequences of the production stoppage is that there is a significant reduction of supply, and we have only seen about a 15 percent reduction in purchase intent for new Toyotas," stated Edmunds.com CEO Jeremy Anwyl.

"Toyota purchase intent is currently holding steady at about 11.8 percent of new car shoppers even as the headlines continue to come out. This is actually good news for Toyota, as it would have been realistic to expect another drop after the added troubles of the last few days," stated Edmunds.com Senior Analyst David Tompkins, PhD. Toyota hit a record low purchase intent of 9.7 percent on January 28, 2010.

For Used Car Shoppers: "Our analysis of actual transactions indicates that so far there is relative stability for Toyota prices at the auctions. Used car supply has been tight for some time, and dealers know that there is enough consumer demand for used cars that the recalled Toyota vehicles will see a modest drop at most," according to Edmunds.com Analyst Joe Spina.

For Current Toyota Owners: "This is not a good time to trade in a Toyota. Affected Toyotas trade-ins have taken as much as a 10 percent hit in value; dealers are taking them from consumers at a lower price even though many of them will generate a higher profit margin for dealers in a few weeks after the recall issue is resolved," according to Edmunds.com Analyst Joe Spina. "Forecasts of residual values are unaffected at this time — remaining higher than most Toyota competitors. We anticipate that any backlash will be short-lived."

Edmunds.com has created a free resource to keep consumers informed about the 2010 Toyota recall (at http://www.edmunds.com/industry-car-news/toyota-recall.html). The page features the Toyota recall list, guidance for driving a vehicle that suddenly accelerates and other critical information, all of which will be updated as new material becomes available.

About Edmunds
Edmunds publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Inside Line is the most-read automotive enthusiast Web site. CarSpace is an automotive social networking Web site. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter @edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.