by Christopher Freeburn | June 17, 2013 10:55 am
Toyota‘s (TM) Financial Services division has ended a practice that allowed a small number of local dealerships to sell extended warranties nationwide.
In May, the Japanese auto giant amended its policy covering online sales of its service warranties, restricting such sales to vehicle owners in the state where the dealership is located. The company says the policy shift was driven by fears that the cross-state sales could violate local regulations. The company had also received complaints from other dealers about the online sales, Automotive News notes.
The company has 1,616 dealerships based in the U.S. The extended warranties — Toyota ExtraCare Vehicle Service Agreements — are popular with customers, who purchased 534,526 agreements over the past year.
Dealers who sold the contracts online say they were able to offer considerable price discounts to customers.
Toyota continues to fend off challenges from General Motors (GM) and Volkswagen (VLKAY) to retain the title of world’s top-selling automaker.
Shares of Toyota climbed more than 2% in Monday morning trading.
Source URL: http://investorplace.com/2013/06/toyota-pulls-plug-on-nationwide-online-warranty-sales/
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