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Toyota Lease, Backcharged for paint
  • batman
  • Pennsylvania, United States
I have seen many Toyota enthusiasts on this website so I have a good industry question.

I have personally witnessed many "cheap" Toyota leases end up in huge backcharges for things as minor as pedal pads, paint jobs and questionable tires. It seems to me that Toyota buys market share by subsidizing their lease rates then backcharging the customer when the lease is over to make up for the inflated residual. The Toyota dealer sometimes tries to trap the customer by offering to roll the backcharges into a new lease with even greater residuals and subsidized rates futher trapping the end user into being a lifelong Toyota user.

To be fair, I want to emphasize that this is witnessed only by our local Toyota dealer and I don't want to speak for Toyota in general but I would like to hear some responses by past lessee's and other Toyota buffs. I would like to know if this is a local phenomenon or if this is how Toyota is grabbing market share.
  • Posted 29 Nov 2007 02:01 PM
Total replies: 34. Showing items 1 - 20 of 34 results.
12
Replies
batman,

This is a dealer by dealer dicission no matter what manufacturer you represent. Any dealer could do this, which is why the dealer support and relationships are so important.
  • Posted 30 Nov 2007 11:02 AM
  • batman
  • Pennsylvania, United States
Most lease contracts are written in a way that normal wear and tear is tollerable at the lease end so the customer can feel confident that they would not be charged for cosmetic damages. However, I have seen some Toyota leases worded in a way that leaves the end of lease inspection purely in the dealers hands and nothing is written in the contract to take care of cosmetic damages and normal wear, say on tires. That is why I posted the question, is this a nationwide Toyota tactic or just used by some dealers?
  • Posted 1 Dec 2007 08:38 AM
This is a dealer to dealer decision. Normal wear aand tear means different things to different people. Some people understand this to mean paint, tires, and dings. Other understand it to mean the above plus OHG, Forks, LBRs, Rims.
  • Posted 1 Dec 2007 11:14 AM
  • chris_n
  • West Midlands, United Kingdom
This is down to the indidual dealer and I am sure not a Toyota policy. My advice would be to change dealer now, you might be surprised how soon those backcharges would be completely waived.
  • Posted 1 Dec 2007 10:29 PM
  • • Modified 1 Dec 2007 10:30 PM by poster
  • EasyM
  • South Carolina, United States
I see this type of thing quite often with Toyata leases. I recently lost a deal to Toyota. The customer had 5 lift trucks that were due to come off lease. I personally looked at the Toyota's and didn't really notice anything wrong with them other than normal wear and tear. The customer was given a proposal to "bring the Toyota lift trucks up to speed". This proposal had a price of about $5,000.00 PER TRUCK. Toyota then told the customer that they would "waive" these charges if they were given the order for the new ones. The customer buckled and gave Toyota the order. Toyota won the battle but lost the war in this case because the customers corporate office fully understood what kind of tactics were being used and removed Toyota from the approved vendor's list.

Here's my thought. If the trucks needed to be "brought up to speed" at a cost of $5,000.00 each., it wouldn't matter if the got the new order or not. Either the trucks needed the repairs or they didn't.

Btw, this was not a local dealer deal, this was a National Account deal.
  • Posted 11 Dec 2007 12:50 AM
guys, you should see the Philippines. Its for you to find out
  • Posted 27 Dec 2007 02:50 PM
  • batman
  • Pennsylvania, United States
Normally on these types of Toyota leases the paper is being held by TMH with a subsidized residual and subsidized interest rate. They give these ridiculous rates and residuals up front to bring down the monthly cost of the equipment, then backcharge for everything in the end to make up for lost profit. There are some car companies known for this practice as well which is where car leasing originally got it's bad name. Toyota is not one of the car companies.
  • Posted 28 Dec 2007 09:32 AM
Batman,

First of all what is TMH? Toyota's fincance company is TFS. Secondly you have no clue as to what you're talking about! Lease rates at one time or another are subsidized by every lift truck/finance company. It just so happens that since Toyota owns it's own finance company and does everything in house, that it has better control over the entire process. The residuals are set by Toyota some of the time and other times dealers will set the residuals and guarantee the residual amount. This is done to get the deal, but the dealer is on the hook for the residual. EVERY MAJOR LIFT TRUCK DEALER DOES THIS!!! The expected condition of the forklift when it's returned is clearly spelled out in every lease when the customer signs it. The condition language is the same on every lease agreement regardless of the manufacturer Toyota, Nissan, Yale, Cat, etc...

Batman it seems that you have been trapped in your own little corner of the world for a long time. Looking at the shear volume of your posts some might say "It's better to remain silent and be thought a fool than open ones mouth and remove all doubt".
  • Posted 28 Dec 2007 10:53 AM
Toyotaman,
I have ran into a few situations similar to what is being discussed in this forum.
It seems a little strange that nobody has mentioned this happening in CAT, Nissan, Komatsu, etc. leases but are only discussing Toyota.

earth is 2/3 water and 1/3 land, our time should be divided 2/3 fishing and 1/3 work.
  • Posted 28 Dec 2007 11:42 AM
  • batman
  • Pennsylvania, United States
My posts are unbiased and I do not favor any one manufacturer. I tell the truth. Your User ID tells everyone that you are biased and will defend Toyota regardless if you know the truth or not.

Here are FACTS:

1. Not all lease documents are worded the same. Lease end conditions vary and can be customized by the dealer, OEM or bank whoever holds the paper on that particular lease.

2. Regardless of wording not all dealers will hold the user liable and it is up to the lessor (bank, etc.) how to charge the customer at the end of the lease.

3. Toyota does own their own finance company but the finance arm has absolutely nothing to do with the material handling arm of the business, therefore they want to make money. The material handling division of Toyota must subsidize the lease. The finance division is not going to lose money to help sell forklifts. That is not the way big business works. In the end it is Toyota Material Handling that owns the equipment and must purchase said equipment from the finance division.

4. I have been in this business a long time but will be the first one to say I don't know everything. I am relaying what I see in the field. All of my posts are from first hand knowledge, never third hand information. Of course the dealer in your area may conduct business differently, as long as they keep selling lots of forklifts Toyota will keep them no matter if their business ethics differ.

5. The "shear" you spelled should be spelled "sheer". Shear is to cut something. Call me if you want to talk about it: Phone # 1-800-TOYOTAS-ARE-JUNK
That was for the fool quote.
  • Posted 28 Dec 2007 11:44 AM
Batman,

The entire world that purchases forklifts must be stupid. They have been making Toyota the number one lift truck manufacturers since 2002. Since you say Toyota lies, cheats, builds terrible product, is the cheapest forklift on the market they must be stupid to get treated this way and still keep lining up to purchase Toyotas.

The truck is Toyota is very good at engineering their product and also marketing their product. I represent several other brands besides Toyota and they are in general 10% less than Toyota. The fact that the Toyotas have a 15% higher residual at the end of the lease help to level the playing field.

By the way the residuals should represent a good estimation of what the truck is worth at the end of the lease. Why are the Toyota residuals more? BECAUSE THIS IS WHAT THE OPEN MARKET IS WILLING TO PAY FOR THEM!

Yes my screen name is up front and lets everyone know where I'm coming from, I thought this would be better than trying to fool everyone.

Also I have worked for Toyota, Cat, Nissan and Yale. The lift condition language is virtually the same for every company! Regardless if it's TFS, CFS, YFS, Citi, Associates, Greater Bay, etc...

So Batman, what do you try and sell?
  • Posted 29 Dec 2007 12:41 AM
  • batman
  • Pennsylvania, United States
I did mention that everything that I have been writing is from my own first hand account. I represent a very small market area in that I live and work in Central PA. In fact this post started because I wanted feedback from other parts of the country to see if this is widespread practice with all Toyota dealers or just relegated to the few unethical dealers that I am forced to deal with.

I know Toyota will hold a higher residual on a lease, especially the dealers in my area because they almost always end up backcharging the customer to make up for the higher residual. I didn't say this was a nationally accepted way of doing business by Toyota. It sounds like you are familiar with the Toyota leases, so I would take for granted that your dealership does not backcharge customers to make up for lost profits on higher up front residuals from what you have been posting. I think Toyota does make a very competitive product, their problem in my market area is who represents them.

As for your question, I don't sell anything anymore. In the past I've sold Linde, Heli, Lift Dynamics, TCM, Komatsu, Lancer, Drexel, Nissan and I'm sure others that I am forgetting. I have been in the parts end of this business, management, accounting and worked in the shop in my 17 year tenure. I now am a road tech working for a very large dealer, who I will not mention, so I have seen this business from all angles and I feel that I am fairly knowledgeable about the industry. Of course I don't have all the answers, (if I did I would be retired playing Xbox & drinking beer) which is why I started this post, just to gather more information.
  • Posted 29 Dec 2007 11:17 AM
  • justme
  • New York, United States
I WORKED FOR A TOYOTA DEALER, A FEW YEARS AGO AND I CAN SAY THEY WILL TRY ANY UNETHICAL AND EVEN HAVE BEEN CAUGHT DOING IT. MOST OF THE TIME IF THE CUSTOMER STAYED WITH THEM THE BACKCHARGING THE CUSTOMER WOULD BE FORGIVEN I DON'T THINK THAT TOYOTA WOULD SEE IT THAT WAY, WE EVEN SEEN IT PUT BACK INTO THE LEASE AND UNFAIRLY HIDING IT FROM THE CUSTOMER. OR BILLING IT TO EACH WORK ORDERS AT A LATER DATE THATS, HOW OUR MANAGEMENT WORKED,IT WAS ABOUT THE BOTTOM LINE, THAT IS WHY I AND 45 OTHER MECHANIC AND MANAGER LEFT IN FOUR YEARS [url removed] ABOUT THAT FOR A SECOND.
  • Posted 23 Jan 2008 02:28 PM
Once again Toyota shows their unethical ways of doing business.

earth is 2/3 water and 1/3 land, our time should be divided 2/3 fishing and 1/3 work.
  • Posted 23 Jan 2008 11:36 PM
It seems to be that people confuse the people who do the best marketing with people who makes the best forklift truck. Their new "Green" ads are quite appropos.

I would expect their next gimmick will be "Buy Here", "Pay Here".

duodeluxe
  • Posted 24 Jan 2008 01:22 AM
I never have worked for Toyota, but it is not conceivable that a company that has grown to the number one lift truck company in the world by instituding "unethical" practices with thier customers or condoning the same with their dealer organization.

"Have An Exceptional Day!"
  • Posted 24 Jan 2008 04:55 AM
As long as the green aspect was mentioned I thought I would share some info.

I delivered a new 8-series to a customer the other day. The customer has a fleet of mostly Toyota 5,000 lb. pneumatics. They also have a 3 month old ale with the GM engine.

They were very concerned with emission since this is a primarily indoor application. They called me over to show me something. They had their CO (Carbon Monoxide) monitor in hand and the Yale and new Toyota were side by side. Both had been used for a few hours and the operators were on break.

They proceeded to show me the CO levels at idle. Both trucks were 4-5 PPM at the tailpipe.

At full RPM the Yale was 130 PPM and the Toyota was 8 PPM. They gave me an order for 5 more trucks the next day.
  • Posted 27 Jan 2008 11:11 AM
  • batman
  • Pennsylvania, United States
Actually true emission tests are measured by g/kW-hr of HC+NOx and the same for CO pollutants. (g/kW-hr stands for grams per kilowatt-hour. HC = hydrocarbons, NOx = nitrogen oxides and CO = carbon monoxide) To say the Yale was 130 PPM and the Toyota was 8PPM is more than likely a mistake since the GM engine used in the Yale exceeds EPA/CARB emission standards into 2010. Since the fuel delivery system of the forklift determines the emission output I would say there was either a problem with the fuel system of the Yale or somebody was reading the monitor wrong. Any Tier 3 fuel system is sealed and cannot be tampered with so the problem is more than likely with the CO monitor or the people using it. However, Kudos to you for selling five new trucks on nothing more than a mistaken reading of a CO monitor. Take those "gimme" sales every chance you get because eventually you'll have to sell on merit, that's when it's tough.
  • Posted 30 Jan 2008 12:14 PM
Batman,

I understand what your saying but I saw all the numbers I stated with m own eyes. This wasn't a studay or a third hand report. This was a simple test done by the customer in my presence.
  • Posted 30 Jan 2008 11:06 PM
  • roadrat
  • North Carolina, United States
Respose to duodeluxe: Kind of like the new add by the railroad folks hauling several tons of freight several hundred miles on one gallon of diesel.
  • Posted 20 Feb 2008 01:14 PM
Total replies: 34. Showing items 1 - 20 of 34 results.
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