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Report: Toyota to Ban Advertising Vehicles Below Invoice

Motor Trend logo Motor Trend 8/24/2015 Kelly Pleskot

Toyota will ban U.S. dealerships from advertising its namesake-brand vehicles at prices below invoice, according to a report from Automotive News. The carmaker follows in the footsteps of Honda, which has a similar policy.

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Dealers told the publication that Toyota will discuss the ban at a national dealer meeting next month in Las Vegas. The policy is expected to go into effect in January.

As you can imagine, Toyota dealers have expressed all sorts of mixed reactions. Some commend the policy for increasing vehicle prices, which should improve gross profits for their businesses. Meanwhile, the ban could benefit consumers who would no longer have to endure "bait-and-switch tactics," in which dealers offer great deals online that don't match the exact car and incentives available at the showroom.

2015 Toyota Corolla LE ECO Front Three Quarter 02© Provided by MotorTrend 2015 Toyota Corolla LE ECO Front Three Quarter 02

But other dealers are crying foul, saying that the move would actually hurt their haggle-free policies. Earl Stewart, dealer principal of Earl Stewart Toyota in Lake Park, Fla., told AN that he advertises his best prices upfront so he doesn't have to come down on prices. Three of every four vehicles he lists end up below invoice. He claims this strategy has helped him become one of the highest-volume dealerships of any brand in his region.

Speaking of haggle-free, Lexus just announced it will experiment with a one-price sales model at certain dealerships across the country. The pilot program will roll out in 12 dealerships this year, and calls for dealers to commit upfront to vehicle prices.

Source: Automotive News (Subscription Required)

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