Toyota stops dealers from selling service contracts over the Internet

Article by Anita Panait, on June 21, 2013

Toyota Financial Services has stopped several dealerships from selling Toyota-sponsored extended service contracts -- Toyota ExtraCare Vehicle Service Agreements -- over the Internet nationwide, Automotive News reports. In May 2013, the company revised its policy on dealerships' nationwide online sales of extended service contracts following worries that it might breach state commerce regulations that vary from jurisdiction to jurisdiction, according to company spokesman Justin Leach.

Under the new policy, the contracts can be sold by dealerships either at the store or on a dealership's Web site, but only within the state where the dealership is based.

One of these dealerships that used to sell extended service contracts nationwide over the Internet is Acton Toyota of Littleton, Massachusetts. According to Automotive News, Acton Toyota had been selling extended service contracts online for up to $750 less than other dealerships.

Justin Brun, e-commerce manager at Acton Toyota, remarked that Toyota Financial Services’ decision was “devastating” to them.

Brun advertised on Toyota enthusiast sites and used aggressive search-engine promotion to fuel sales of the contracts, of which 100 are sold every month from across the United States. Brun disclosed that some Toyota dealers didn’t like how Acton Toyota did business.

Leach confirmed to Automotive News that Toyota Financial Services had received complaints from dealers about the online sales. He said that no state examiners or insurance examiners had raised an issue about the practice. Toyota has 1,616 US dealerships. As for Acton Toyota, Brun said the dealership is replacing some of the lost revenue with an expanded online offering for Toyota customers -- prepaid maintenance plans. [source: automotive news - sub. required]

Topics: toyota, sales

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