Everyone's Doing It: Toyota Joins the Club, Slashes Rates

When venturing out of the home carries an extra degree of danger, automakers know there needs to be a reward for breaking self-isolation. Even if physically entering a dealership isn’t necessary, there’s still the current economic uncertainty to dissuade customers.

As we told you yesterday, U.S. auto sales are on the rebound, slowly rising from the rock-bottom position reached less than a month ago. While per-vehicle incentives are, on average, on the decline (the byproduct of a smaller pickup slice in the retail mix), discounts aren’t the only way to lure customers into a buy. There’s also loan rates — and it seems Toyota has finally arrived at that party.

As reported by sales sleuths CarsDirect, Toyota has slashed loan rates on key models, following a trend started a month ago by panicky OEMs.

Analyzing a dozen U.S. markets, the publication notes that the RAV4, Camry, and Tacoma — best-sellers in their respective classes — have suddenly seen an APR haircut. That includes zero-percent APR for 60 months on a 2020 RAV4 in California, saving the buyer $4,000 over the life of the loan when compared to the previous offer.

The same offer can be found on the 2020 Tacoma, with 72-month loans seeing a corresponding drop in annual interest.

“In New York, the best rate yesterday was 3.9 percent. Today, it’s 1.9 percent,” CarsDirect notes. “On a $35,000 truck, that equates to a $31 improvement in payment and nearly a 52-percent drop in interest cost from $4,311 to $2,061.”

While the zero-percent/84-month offers seen elsewhere in the industry do not appear in the Toyota fold, the new offers are an improvement over what came before. As J.D. Power laid out yesterday, import automakers are gaining ground on the Detroit Three again after several weeks of truck-fueled domestic dominance. Sales growth in the compact SUV segment was notable, though that category is still down severely from pre-virus forecasts.

The opening of two large markets in the past couple of weeks (Michigan, Pennsylvania) to online sales, along with improving viral situations in large markets like New York and California, represents an opportunity for automakers to lessen some of the pandemic-borne damage — assuming they can lure customers into a buy.

[Image: Toyota]