Why You Shouldn't Trade In Your Toyota Now
By JENNIFER SARANOW SCHULTZ
Nick Ut/Associated Press
With demand for recalled Toyotas nearly nonexistent right now, their resale values have already started dropping.
If you own a Toyota model and are considering trading it in because you're worried about accelerator pedal problems, you may want to wait at least three months and focus instead on getting your vehicle fixed.
"Right now would be the very worst time to make any kind of resale move," said Phil Reed, senior consumer advice editor at Edmunds.com. "In the short term, if at all possible, don't do anything. The more time you put between these two recalls and when you sell, the better off you are going to be."
Last week, Toyota announced that it was recalling about 2.3 million vehicles for an accelerator malfunction that safety regulators have deemed "dangerous," expanding a recall from last November. It also said it would temporarily stop production of the eight affected models. With demand for the recalled Toyotas nearly nonexistent right now, the vehicles' resale values at used car auctions and dealerships have already started dropping, and it's too early to tell if they will be affected further, according to Kelley Blue Book.
"Owners should probably refrain from trading in unless they are willing to accept a lower trade-in value," said Juan Flores, director of vehicle valuation at Kelley Blue Book.
Kelley Blue Book analysts said they expected the average resale value of recalled Toyota models at auction houses and dealerships to drop 1 to 2 percent this week from its level before the recall. This translates to roughly a $200 to $400 decline, depending on the model.
Even more, Kelley Blue Book is forecasting that the resale values of the recalled Toyotas will drop anywhere from 3 to 5 percent in total during the time it takes to fix all the recalled vehicles. And while the resale values of nonrecalled Toyotas haven't dropped, they also haven't appreciated as they normally would this time of year, according to Kelley Blue Book.
Edmunds.com, meanwhile, has even more aggressive estimates. It estimated that resale values of recalled Toyotas at auctions fell 10 percent last week. But it expects the values to recover slightly and be down 4 to 6 percent this week.
Regardless of the exact percentage, the drop in the resale values of recalled Toyotas means that the $1,000 trade-in incentives other car makers are offering to Toyota owners aren't necessarily good deals. "I would strongly caution anybody against responding to those incentives," said Mr. Reed of Edmunds.com (see more tips from Edmunds.com for owners of recalled Toyotas here). "While car dealerships are saying they are going to give $1,000 extra, it could be $1,000 over a very low price."
In addition, if history is any lesson, resale values tend to drop soon after major recalls and then eventually rise again. After the recall of Ford Explorers earlier this century because of tire failures, the resale values of the models dropped 2 to 3 percent or so initially and then gradually caught up again five to six months later, according to a preliminary Kelley Blue Book analysis.
With Toyota's long reputation for safety, quality and reliability, car industry experts at this point expect Toyota's resale values will similarly return to some level of consistency within three to four months.
In the near term, they said, rather than trading in, owners of recalled vehicles who don't want to incur resale losses should focus on getting their vehicles' accelerator pedal problems fixed. Toyota announced Monday that it would start fixing cars this week. (Be sure to get documentation that the vehicle was fixed so you have proof of this. And for more answers to your questions about Toyota's repair plans, click here.)
Then, reconsider trading in three months or longer from now. "If time is not of the essence and you really don't want to incur any financial consequences, then wait sometime greater than three months," Mr. Flores of Kelley Blue Book said. Still, the financial losses may not matter for those concerned with getting peace of mind as "consumption is not exclusively a financial decision," he said. "It's also an emotional decision."
What do you think about waiting to trade in? What should Toyota owners do now?
Answers to Questions About Toyota's Repair Plans
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By MICHELINE MAYNARD
Published: February 1, 2010
Toyota said on Monday that its dealers in the United States would begin repairing later this week 2.3 million vehicles e involved in a recall for accelerator pedals that could potentially stick. Here are some details about the situation.
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Toyota Says It Will Start Fixing Recalled Cars This Week (February 2, 2010)
Bucks: Why Not to Trade In Your Toyota Now
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Q. Which cars are involved?
A. The recall involves Toyota division vehicles, including all 2009-10 Matrixs, 2005-10 Avalons, 2007-10 Tundras and 2008-10 Sequoia vehicles. Some 2009-10 RAV4s and Corollas, 2007-10 Camrys and 2010 Highlanders models are involved.
No Lexus or Scion vehicles are involved, and the Prius, Tacoma, Sienna, Venza, Solaris, Yaris, 4Runner, FJ Cruiser, Land Cruiser, Highlander hybrid and the Camry hybrid are not involved. Also, Camry, RAV4, Corolla and Highlander vehicles with Vehicle Identification Numbers (VIN) that begin with "J," meaning that they are built in Japan, are not affected by the accelerator pedal recall.
Q. What is the problem that could happen?
A. The accelerator pedal on the recalled models could become stuck in a partly depressed position, or it could be slow to return to idle.
The National Highway Traffic Safety Administration, in its advice to drivers of Toyota vehicles, said that "Owners of these vehicles should pay attention to the operation of their accelerator pedals. If their accelerator pedal is harder to depress than normal or slower to return, it may be a precursor to a stuck pedal. These vehicles should be parked and a dealer immediately notified."
Q. What should I do if my accelerator sticks?
A. Toyota has step-by-step instructions here.
Briefly, if the accelerator sticks, Toyota says the vehicle can be controlled with a firm and steady application of the brakes. But it says drivers should not pump the brakes, because that could deplete the vacuum assist, meaning it will take more effort to stop the car.
Once the car is slowed, the company is telling drivers to put the transmission into neutral, and steer it off the road. It should be driven to the closest safe place. Then shut off the engine and call a dealer for assistance.
Q. Should I just shut off the engine while I'm driving?
A. In its advice to consumers, Toyota said that should be done only if a driver could not put the car into Neutral. If the engine is off, the power assistance to the brakes and steering wheel will be lost, but Toyota said the vehicles could still be steered and stopped.
Q. What kind of repair will Toyota make?
A. Toyota says it will install a stainless steel reinforcement bar, like a shim, into the pedal assembly. It is designed to keep the pedal from sticking and will assure that it returns into place. The company says drivers will not notice any different feel to the accelerator pedals.
Q. How do I know this will work?
A. The company's engineers tested the remedy on pedals that were known to stick, and says it stopped them from sticking.
Q. Is my car safe to drive if it has been recalled?
A. The company says that it is. James Lentz, the president of Toyota Motor Sales U.S.A., said he was confident in allowing his family members and friends drive the cars.
Q. Which cars take priority, the ones with owners or the ones on showroom lots?
A. Owners take priority. Toyota said dealers would begin receiving the parts this week. In the case of owners whose vehicles were part of an earlier recall involving floor mats, Toyota said both repairs could be performed at once.
Q. What if I'm shopping for a car? Are the Toyotas at dealerships safe?
A. Toyota is not selling the models involved in the recall until they can be repaired. It has not said how long that will take, but it says that dealers will be repairing and releasing vehicles for sale as they are able to do so.
Q. I bought a Toyota right after it announced the recall, but before it announced it was stopping sales. What should I do?
A. Toyota said it would work with customers on a case-by-case basis. At the very least, the company will repair the vehicle if it is on the recall list.
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By MICHELINE MAYNARD
Published: February 1, 2010
Toyota said on Monday that its dealers in the United States would begin repairing later this week 2.3 million vehicles e involved in a recall for accelerator pedals that could potentially stick. Here are some details about the situation.
Related
Toyota Says It Will Start Fixing Recalled Cars This Week (February 2, 2010)
Bucks: Why Not to Trade In Your Toyota Now
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Q. Which cars are involved?
A. The recall involves Toyota division vehicles, including all 2009-10 Matrixs, 2005-10 Avalons, 2007-10 Tundras and 2008-10 Sequoia vehicles. Some 2009-10 RAV4s and Corollas, 2007-10 Camrys and 2010 Highlanders models are involved.
No Lexus or Scion vehicles are involved, and the Prius, Tacoma, Sienna, Venza, Solaris, Yaris, 4Runner, FJ Cruiser, Land Cruiser, Highlander hybrid and the Camry hybrid are not involved. Also, Camry, RAV4, Corolla and Highlander vehicles with Vehicle Identification Numbers (VIN) that begin with "J," meaning that they are built in Japan, are not affected by the accelerator pedal recall.
Q. What is the problem that could happen?
A. The accelerator pedal on the recalled models could become stuck in a partly depressed position, or it could be slow to return to idle.
The National Highway Traffic Safety Administration, in its advice to drivers of Toyota vehicles, said that "Owners of these vehicles should pay attention to the operation of their accelerator pedals. If their accelerator pedal is harder to depress than normal or slower to return, it may be a precursor to a stuck pedal. These vehicles should be parked and a dealer immediately notified."
Q. What should I do if my accelerator sticks?
A. Toyota has step-by-step instructions here.
Briefly, if the accelerator sticks, Toyota says the vehicle can be controlled with a firm and steady application of the brakes. But it says drivers should not pump the brakes, because that could deplete the vacuum assist, meaning it will take more effort to stop the car.
Once the car is slowed, the company is telling drivers to put the transmission into neutral, and steer it off the road. It should be driven to the closest safe place. Then shut off the engine and call a dealer for assistance.
Q. Should I just shut off the engine while I'm driving?
A. In its advice to consumers, Toyota said that should be done only if a driver could not put the car into Neutral. If the engine is off, the power assistance to the brakes and steering wheel will be lost, but Toyota said the vehicles could still be steered and stopped.
Q. What kind of repair will Toyota make?
A. Toyota says it will install a stainless steel reinforcement bar, like a shim, into the pedal assembly. It is designed to keep the pedal from sticking and will assure that it returns into place. The company says drivers will not notice any different feel to the accelerator pedals.
Q. How do I know this will work?
A. The company's engineers tested the remedy on pedals that were known to stick, and says it stopped them from sticking.
Q. Is my car safe to drive if it has been recalled?
A. The company says that it is. James Lentz, the president of Toyota Motor Sales U.S.A., said he was confident in allowing his family members and friends drive the cars.
Q. Which cars take priority, the ones with owners or the ones on showroom lots?
A. Owners take priority. Toyota said dealers would begin receiving the parts this week. In the case of owners whose vehicles were part of an earlier recall involving floor mats, Toyota said both repairs could be performed at once.
Q. What if I'm shopping for a car? Are the Toyotas at dealerships safe?
A. Toyota is not selling the models involved in the recall until they can be repaired. It has not said how long that will take, but it says that dealers will be repairing and releasing vehicles for sale as they are able to do so.
Q. I bought a Toyota right after it announced the recall, but before it announced it was stopping sales. What should I do?
A. Toyota said it would work with customers on a case-by-case basis. At the very least, the company will repair the vehicle if it is on the recall list.
Toyota Says It Will Start Fixing Recalled Cars
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By NICK BUNKLEY
Published: February 1, 2010
DETROIT — Toyota Motor on Monday said repairs to accelerator pedals in millions of recalled vehicles would begin later this week as it tried to reassure customers and show that it had the situation under control.
Enlarge This Image
Toyota Motor Sales, USA, Inc.
Toyota released this graphic showing the fix for accelerator pedals in millions of recalled vehicles.
Multimedia
Video
Toyota Executive on Gas Pedal Fix
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Answers to Questions About Toyota's Repair Plans (February 2, 2010)
Bucks: Why You Shouldn't Trade In Your Toyota Now
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Toyota said many dealers had extended hours and some would stay open around the clock so that the pedals could be fixed as quickly as possible.
The president of Toyota Motor Sales U.S.A., James Lentz, maintained that the pedal repairs, along with modifications aimed at preventing the pedal from getting trapped under the floor mat, would resolve the problems with unintended acceleration that prompted the recalls.
"These two fixes solve the issues that we know of," Mr. Lentz said on a conference call with reporters. "It is not an electronics issue."
Mr. Lentz maintained that the vehicles under recall were safe to drive, even before the repairs were made, unless drivers experienced signs that the pedal had become worn and was more difficult to use.
"I feel comfortable having people that are close to me driving our products," he said. "That's what I tell my friends and neighbors when they as me as well. I am confident that these vehicles are safe."
The company said its engineers had developed and "rigorously tested" a remedy that involved reinforcing the pedal before vehicles leave the factory to eliminate excess friction. On cars and trucks that already have been sold, dealers will perform what Toyota said was an "effective and simple" process that involved installing a steel reinforcement bar into the pedal assembly to reduce the surface tension that could cause it to stick.
Toyota said that the parts needed were already on the way to dealers and that it had begun training workers how to make the repairs. Each repair is expected to take about 30 minutes, or less after dealers become accustomed to the process, Mr. Lentz said.
Mr. Lentz said dealers would prioritize repairs to their customers' vehicles before the cars and trucks on their lot.
The announcement came nearly a week after Toyota suspended sales and production of eight models, including the top-selling sedans in the United States, the Camry and Corolla.
The company plans to send notices by mail to owners of the vehicles affected by the recall, but the letters could take several weeks to reach everyone. It is urging customers to wait until they receive a letter before contacting their dealer for a repair appointment.
Mr. Lentz said Toyota first received reports of sticking pedals on three vehicles in October but he denied that the carmaker waited too long to react. Robert M. Waltz, Toyota's vice president for product quality and service support, said in the conference call that duplicating the problem was difficult and that tests did not immediately show the need to issue a recall. On Nov. 2, another American Toyota executive, Bob Carter, told reporters that the company had no evidence of problems beyond the vehicles' floor mats, which it had told customers to temporarily remove.
Mr. Lentz said Toyota was "sorry for what we've put our customers through" and said the company was just as focused on building reliable cars as it ever has been.
"This is embarrassing for us, but it doesn't necessarily mean that we have lost our edge on quality," Mr. Lentz said. "Our reputation is based on safety."
Sales figures being released Tuesday are expected to show that Toyota's market share in the United States fell in January to the lowest level in four years as a result of the sales suspension and recalls, according to a forecast from Edmunds.com. Several rival carmakers have been offering $1,000 discounts to consumers who trade in their Toyotas.
Since November, Toyota has recalled more than eight million vehicles globally in two recalls for problems with their accelerator pedals. About six million of the vehicles are in the United States.
In 4.1 million vehicles, the company says, worn pedals can become hard to depress, slow to spring back or become stuck partly depressed, while 5.4 million have a design flaw in which Toyota says the pedal can become trapped beneath the floor mat. Several models are covered by both recalls.
The models with the sticky pedal problem are the ones for which sales in North America were suspended last week. (European versions already were being built with different pedals.) Production of those models stopped Monday at five factories in the United States and Canada and is scheduled to resume next week, Toyota said.
Sunday and Monday, Toyota ran full-page ads in more than 20 newspapers across the United States telling consumers that it had initiated merely a "temporary pause" in sales and production of the recalled models. The company said it had taken "this unprecedented action" because "it's the right thing to do for our customers."
However, the transportation secretary, Ray LaHood, told a Chicago radio station last week that Toyota had halted production "because we asked them to."
Mr. Lentz disputed Monday that the government played a role in the stoppage. A spokesman, Mike Michels, said Toyota acted within a "reasonable" time in stopping production five days after announcing the recall.
"The decision to recall these vehicles, a voluntary decision, was Toyota's," Mr. Lentz said. "We had a legal and an ethical requirement" to stop selling the vehicles.
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(177)
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By NICK BUNKLEY
Published: February 1, 2010
DETROIT — Toyota Motor on Monday said repairs to accelerator pedals in millions of recalled vehicles would begin later this week as it tried to reassure customers and show that it had the situation under control.
Enlarge This Image
Toyota Motor Sales, USA, Inc.
Toyota released this graphic showing the fix for accelerator pedals in millions of recalled vehicles.
Multimedia
Video
Toyota Executive on Gas Pedal Fix
Related
Answers to Questions About Toyota's Repair Plans (February 2, 2010)
Bucks: Why You Shouldn't Trade In Your Toyota Now
Add to Portfolio
Toyota Motor Corp
Go to your Portfolio »
Readers' Comments
Share your thoughts.
Post a Comment »
Read All Comments (177) »
Toyota said many dealers had extended hours and some would stay open around the clock so that the pedals could be fixed as quickly as possible.
The president of Toyota Motor Sales U.S.A., James Lentz, maintained that the pedal repairs, along with modifications aimed at preventing the pedal from getting trapped under the floor mat, would resolve the problems with unintended acceleration that prompted the recalls.
"These two fixes solve the issues that we know of," Mr. Lentz said on a conference call with reporters. "It is not an electronics issue."
Mr. Lentz maintained that the vehicles under recall were safe to drive, even before the repairs were made, unless drivers experienced signs that the pedal had become worn and was more difficult to use.
"I feel comfortable having people that are close to me driving our products," he said. "That's what I tell my friends and neighbors when they as me as well. I am confident that these vehicles are safe."
The company said its engineers had developed and "rigorously tested" a remedy that involved reinforcing the pedal before vehicles leave the factory to eliminate excess friction. On cars and trucks that already have been sold, dealers will perform what Toyota said was an "effective and simple" process that involved installing a steel reinforcement bar into the pedal assembly to reduce the surface tension that could cause it to stick.
Toyota said that the parts needed were already on the way to dealers and that it had begun training workers how to make the repairs. Each repair is expected to take about 30 minutes, or less after dealers become accustomed to the process, Mr. Lentz said.
Mr. Lentz said dealers would prioritize repairs to their customers' vehicles before the cars and trucks on their lot.
The announcement came nearly a week after Toyota suspended sales and production of eight models, including the top-selling sedans in the United States, the Camry and Corolla.
The company plans to send notices by mail to owners of the vehicles affected by the recall, but the letters could take several weeks to reach everyone. It is urging customers to wait until they receive a letter before contacting their dealer for a repair appointment.
Mr. Lentz said Toyota first received reports of sticking pedals on three vehicles in October but he denied that the carmaker waited too long to react. Robert M. Waltz, Toyota's vice president for product quality and service support, said in the conference call that duplicating the problem was difficult and that tests did not immediately show the need to issue a recall. On Nov. 2, another American Toyota executive, Bob Carter, told reporters that the company had no evidence of problems beyond the vehicles' floor mats, which it had told customers to temporarily remove.
Mr. Lentz said Toyota was "sorry for what we've put our customers through" and said the company was just as focused on building reliable cars as it ever has been.
"This is embarrassing for us, but it doesn't necessarily mean that we have lost our edge on quality," Mr. Lentz said. "Our reputation is based on safety."
Sales figures being released Tuesday are expected to show that Toyota's market share in the United States fell in January to the lowest level in four years as a result of the sales suspension and recalls, according to a forecast from Edmunds.com. Several rival carmakers have been offering $1,000 discounts to consumers who trade in their Toyotas.
Since November, Toyota has recalled more than eight million vehicles globally in two recalls for problems with their accelerator pedals. About six million of the vehicles are in the United States.
In 4.1 million vehicles, the company says, worn pedals can become hard to depress, slow to spring back or become stuck partly depressed, while 5.4 million have a design flaw in which Toyota says the pedal can become trapped beneath the floor mat. Several models are covered by both recalls.
The models with the sticky pedal problem are the ones for which sales in North America were suspended last week. (European versions already were being built with different pedals.) Production of those models stopped Monday at five factories in the United States and Canada and is scheduled to resume next week, Toyota said.
Sunday and Monday, Toyota ran full-page ads in more than 20 newspapers across the United States telling consumers that it had initiated merely a "temporary pause" in sales and production of the recalled models. The company said it had taken "this unprecedented action" because "it's the right thing to do for our customers."
However, the transportation secretary, Ray LaHood, told a Chicago radio station last week that Toyota had halted production "because we asked them to."
Mr. Lentz disputed Monday that the government played a role in the stoppage. A spokesman, Mike Michels, said Toyota acted within a "reasonable" time in stopping production five days after announcing the recall.
"The decision to recall these vehicles, a voluntary decision, was Toyota's," Mr. Lentz said. "We had a legal and an ethical requirement" to stop selling the vehicles.
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