Toyota Signature Class vs. Everyone else

[zemien]

Many great topics on used cars here, but today I'd like to focus on the ones offered directly by Toyota dealers under the Toyota Signature Class and SBT.

Are they worth their steeper price tags?

For the sake of our discussion, let's take a Toyota Vitz 2004 (it's what I'm looking for ATM):

Exhibit A: Toyota Signature Class

Toyota North Shore: Vitz 2004 1.3 (47,000km)
$14,995 w/ 3-yr warranty, AA cover, 3-yr WOF

Exhibit B: Everyone else (e.g. dealers, private importers)

N. Auckland Motor Holdings: Vitz 2004 1.3 (76,100km)
$9,995 w/ 6mo registration

This is a typical price premium I see on Signature Classes - $3000 to $5000.

I have tried to quantify their warranty/WOF extras. Here is what I would have to pay if I bought Exhibit B and added my own extras:

• Mechanical warranty + AA cover from Covernow: $1185 ($395/yr)
• WOF checks: $125 (assume $45 each, once a year)

That ultimately comes up to $1310, hardly 30% of the 5k premium.


So to those who have bought imported used cars (esp. Toyotas), do share your experience in regards to warranty.

Or perhaps there's something else I should be looking at or missing out?

PS: I'm factoring out differences like type of stereo, new/old tyres, last oil change, etc. by assuming that I'll be fleeced in this regards and I'll have to fix them anyhow.

[zemien]

To slightly deviate from the original post, I've decided to stick to fresh-off-the-ship used Jap imports because they're subject to very strict inspections at Customs.

Although cars that have been driven around NZ are subject to regular WOFs, a WOF feels too much like a cursory glance through. Things like brake pads are not checked, neither are non-structural rusts nor the gearbox.

[GrumpyGoat]

I am looking at the same thing right now so really curious about observations of others.

I think that interest rate also factors in here (ha!). I think you can get a significantly lower interest rate (if you chose to finance) through Toyota than through banks or finance companies (which seem to be almost double the Toyota Finance rate in some cases)

I don't know if this is part of it or not. Just an observation.

Oh, and I think you will need to get a WOF twice every year--if the car is over 5 years old (or is it 6 years old?)

[mylesdw]

I doubt whether the fact that it was a Toyota SC car will count for much when you come to sell it so you are pretty much going to lose the 5K. The ads claim that the the SC cars are pretty much refurbished so you may be getting a newer look and feel for the extra cash.

All warranties are certainly not created equal, so comparing a basic mechanical warranty to a full one may not be valid.

The example given is much lower mileage than the 'other' one.

On balance it seems hard to justify the extra 5K. You would be better to put the cash in savings and use it as your own insurance against breakdowns. The chances are there won't be any and you'll still have you money at the end of the three years.

Just some rambings...

[lin]

I have a signature class vehicle & I love my car. I am sure my car came with 3 years WOF, Warranty & Servicing as well as the AA roadside service (but I'm already an AA member so no real saving there) which is a little different to what they are currently offering.

In the example you've given above, there is a 30k difference in the mileage though which will obviously influence the price too.

Whether paying an additional premium is worth it for a signature class vehicle, I'm not sure, but I am happy with my car & with the support I've received from the garage.

[victoria24]

base rate for car finance is usually 9-10% so the dealer makes margin over that. if the rate is lower than base then the loss the dealer pays to the finance house is built into the margin in the car. you cant have your cake and eat it.

[GrumpyGoat]

base rate for car finance is usually 9-10% so the dealer makes margin over that. if the rate is lower than base then the loss the dealer pays to the finance house is built into the margin in the car. you cant have your cake and eat it.

Having worked in car finance in the US (a long time ago--was married into a family that owned a bunch of car dealerships), I would say that new car finance made more profit than sale of the vehicle itself. Typically, dealers secure lending at a very low rate from banks and then "mark up" the interest rate several points and make money on the spread. There are formulas for the mark ups depending on car purchased, length of loan etc.

On auto manufacturing finance (like Ford Motor Credit or Toyota Finance), these are typically lower than bank finance--because this is offered as an incentive to sell more vehicles. And they are already profiting on the loan since they will originate and service the loan as well.

But 9-10% as the base rate?
Seems VERY high--doubly high, really--considering rates on term deposits are only @ 5% and @2-3% for savings. Granted, I don't understand what layers of profiteering are built into the system here but still ???

[GrumpyGoat]

I doubt whether the fact that it was a Toyota SC car will count for much when you come to sell it so you are pretty much going to lose the 5K. .

Having been looking at Toyota (both new and pre owned) for a while, if the car is Signature Class pre owned, they do reflect it in the price and also advertise it that way, the second time around.

I mean when people go to sell the Toyota (that they purchased used but Signature Class), they do emphasize it--especially when there is still warranty etc.

[KelvinAng]

But 9-10% as the base rate?
Seems VERY high--doubly high, really--considering rates on term deposits are only @ 5% and @2-3% for savings.

Yes, it's a bit ridiculous. If you approach a bank directly for a "vehicle loan", the published rate is around 13.5%.

Personally, having had my previous Toyota car serviced by a big-name Toyota dealership in town as well as independent garages, I wouldn't favour (and therefore pay a premium for) dealer-serviced vehicles over one that has been serviced by an independent garage. In that regard I wouldn't pay a $3,000 premium for one that's been tagged "Signature Class" over one that's not, all else being equal.

[zemien]

Thanks for the great replies so far! Re: finance, I might go for an even cheaper car (sub-$8000) and then just pay in cash.

After sales service is important to me. Though the warranty terms on paper might read the same, the enthusiasm in which the service is provided might differ greatly.

Like lin and many others have mentioned, Toyota dealerships seem to go out of their way to help, even when it comes to repairs. And it stands to reason that they have the best equipment for the job. (Edit: Just read Kelvin's latest reply - guess Toyota-run workshops are not necessarily the best?)

What about other dealerships or independent warranty providers? Do they avoid emails/calls when you need to use your warranty? Wiggle their way out of paying? If you have met with good/bad experiences, do share with us!

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GrumpyGoat mentioned something about the frequency of WOF checks. I read somewhere (can't find the link now) that NZTA counts the age of the car from when it was first registered in NZ. So if a used 2004 Vitz was brought in today and registered, it's considered 'new' and only requires 1 WOF per year.

Sounds odd to me too. Can anyone confirm?