Chicago: Toyota owners looking to trade in their cars have little reason to sing the carmaker's old ad slogan, "I love what you do for me—Toyota!"
Recalls and a bungled response to safety questions are putting a dent in the resale values of their cars.
For years, Toyotas have been praised both for high quality and maintaining their worth. These days, the Toyota in your garage is no longer like money in the bank.
Some dealers are refusing to accept Toyotas for trade, while others are paying considerably less than they did just two week ago.
Kelley Blue Book has dropped the value of recalled Toyotas by as much 3 per cent. The auto research website Edmunds.com estimates resale or trade-in values could fall up to 10 per cent in the short term.
The decline will likely continue as long as uncertainty and defects continue to shadow the world's No. 1 carmaker.
Toyota Motor Corp. has so far recalled more than 7 million cars in the US, Europe and China over a sticky accelerator and floor mats that can get caught in the gas pedal.
Its prized Prius hybrid, which is partially powered by electricity, is under investigation for momentary brake failure. The company is expected to announce its plan for fixing that model this week.
Kelley, which two months ago named Toyota the best brand for resale value, says recalled models are now worth $200 to $500 less per car.
Another cut of the same magnitude is planned as soon as the coming week unless the recall controversy abates and demand for Toyotas stops declining, Kelley spokeswoman Robyn Eckard says.
Similarly, since the first recall for sticky accelerator pedals on Jan. 21, Edmunds' estimate for the trade-in value of a 2009 Toyota Camry has fallen by 4 percent to 6 per cent to $13,967 while the 2009 Toyota Corolla has declined 6 per cent to $11,233.
"My advice to a consumer would be 'If you don't have to trade one in, wait,"' says Michelle Krebs, senior analyst for Edmunds. "Values will stay down for a bit. But Toyota's got really strong brand equity."
