√Greedy buyers – who ‘flip’ new cars for quick profit

A Toyota dealer has provided a rare insight into how brand-new cars are being resold as ‘used cars’ at drastically inflated prices – while thousands of customers wait in the queue.

EXCLUSIVE

Greedy car buyers – who want to make a quick buck immediately after taking delivery of a brand-new, in-demand vehicle – are also behind the rogue practice of selling new vehicles as ‘used cars’ at wildly inflated prices.

That’s the claim from a major Toyota dealer who has come forward to lift the lid on more examples of what is happening behind the scenes – and why buyers feel like they’re no closer to the front of the queue while they wait months or years for their new car.

Earlier this week, Drive exposed a number of Toyota dealers selling brand-new vehicles as so-called ‘used cars’ for between $6000 and $10,000 above the recommended retail drive-away price for popular models such as the Toyota Corolla Cross Hybrid, Toyota RAV4 Hybrid and Toyota Camry Hybrid.

Drive unearthed countless examples of brand-new Toyota cars being advertised as so-called ‘used cars’ but with inflated prices.

Records showed the vehicles had just been registered and had between 8km and 33km on the odometer.

A Toyota dealer selling one of two identical cars depicted in our story – a Toyota Corolla Cross GXL Hybrid all-wheel drive advertised for $53,888, compared to the standard drive-away price of $47,500 – contacted Drive to explain how some showrooms end up offering brand-new vehicles as so-called ‘used cars’.

“Absolutely there are instances of dealers moving new cars to used cars, but this is rare and it is regrettable,” said the major metropolitan Toyota dealer and automotive industry veteran, who asked to remain anonymous.

“In this instance, however, the customer bought the car new from another Toyota dealer – having waited for an extended period of time – and contacted us to see if we wanted to buy it.

“We paid that customer more than what they paid for the car, and we are now selling that car as a used vehicle.

“We wanted to buy that car so we could serve customers in our local area, and offer it as a used car rather than have that car get sold to someone outside the dealer network, or to a wholesaler, or end up in another state.

“Certainly we understand the frustration of customers in the queue who have been waiting a long time, but there is also a significant number of customers who, once they get to the front of the queue and take delivery of their car, want to sell it right away to make some easy money.

“So there is a proportion of customers who are also in it for the money, and this is also driving up used-car prices. Often the same customers who are flipping cars for a quick profit have also been the ones complaining loudly about the lengthy queue.”

There are numerous examples on social media where people who have been part of a Facebook group – set up by customers waiting extended periods for a new Toyota RAV4 hybrid or Ford Ranger Raptor, for example – end up offering their vehicle for sale as soon as they take delivery.

They claim their “circumstances have changed,” rather than cancelling the order so the car goes to the next person in the queue.

When asked how long the practice of over-charging on in-demand new cars would continue – and when inflated prices were expected to end – the Toyota dealer told Drive: “We will never see a period like this in our lifetime again, where there are wait times of six months to two years for new cars.

“Once the car industry eventually catches up with the backlog of orders, or demand eases – or both – we will stop seeing people trying to charge over-the-odds for new or near-new cars.”

The Toyota dealer said customer demand ultimately defines prices.

“In some cases we have customers offering to pay extra to get bumped up the queue,” he told Drive.

“At the moment, there are ongoing stock shortages and production slowdowns (on in-demand cars) and that has pushed up the prices of those vehicles. But this will not last forever. Frankly, we don’t enjoy buying brand-new cars for more than retail and then reselling them. But if we don’t do it, that car will go somewhere else.”

Another major multi-franchise dealer – not attached to the Toyota network – also speaking to Drive on condition of anonymity said he has had numerous instances of customers selling their new car online within hours of taking delivery.

“These customers were abusing us and asking where their car is. And when we finally got it to them after all the delays, the vehicle was up for sale that night.

“Buyers who are trying to make a quick buck are just as much a part of the problem as dealers trying to find stock when supply is so restricted.

“All the people complaining about high prices – and new cars not going to the next person in the queue – should ask the private-buyer resellers: ‘Why did you take delivery of the car, rather than let the next person in line grab it, if you didn’t want it anymore?’

“Answer: some customers are greedy, too.”

MORE: Toyota dealers busted selling new cars as ‘used cars’ with inflated prices

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