Toyota is trying to stop new-car “scalpers” from pushing up prices

As thousands of Toyota customers battle long wait times, the company wants to find a way to discourage opportunistic resellers who “flip” near-new vehicles to make a quick profit.

Toyota Australia is calling on consumer authorities to introduce regulations that would discourage buyers of near-new cars from selling their vehicles to make a fast buck – and slam the brakes on “scalpers” – as thousands of customers remain stuck in the queue.

Record demand for new cars – combined with ongoing stock shortages and shipping delays – have stretched waiting times for popular models from three months to two years across the auto industry.

The crisis has created a disturbing trend: some customers are offering to sell their place in the queue, or are reselling their vehicle for more than the recommended retail price to buyers who don’t want to wait.

While many industry analysts say these are merely the forces of supply and demand, Toyota Australia says the practice of “flipping” or “short-cycling” a new car disadvantages customers who pay over the odds – and anyone waiting patiently in the queue.

“We’ve spent decades building trust around our brand and it’s quite disturbing to think that we have a few (customers) who are short-cycling our cars to make money,” said Sean Hanley, the sales and marketing boss of Toyota Australia, and a 30-year veteran of the car industry. 

“We need to protect as best we can our customers from those types of behaviours,” he said, drawing a comparison with scalpers who horde tickets to live shows, and then sell them for higher than their box office price.

“We want this situation changed,” said Mr Hanley. “We want customers to pay a fair and reasonable price based on the manufacturer’s retail price.

“Used cars are a different matter. But for a new car, we don’t want customers paying over the odds. We intend to investigate everything we can within the legalities of Australian Consumer and Competition Law to try to (find a solution).

“I urge governments and authorities to please consider this proposition and what’s happening in the market now, because we’re all about protecting consumers. Yet we’re seeing (overcharging by private resellers) going on, so we’ve got to work together to say ‘hey, this has got to stop’.”

Toyota Australia is on track for record new-car sales in 2022 – in a market that is down 4.5 per cent year-to-date – as market research shows consumers gravitate to brands they trust in times of crisis.

“That’s why it’s so deeply important we take that leadership position (to address) any sort of price gouging, any sort of price scalping. We’ve got to stop that. Not only at Toyota, but as an industry.”

In Japan and North America, some car dealerships insist customers sign a document agreeing to not on-sell the car for a quick profit, however such a requirement is illegal in Australia.

“We are acutely aware of the legalities around these sorts of activities,” said Mr Hanley. “So we’d have to very much clear anything we do legally within Australian Consumer Law and Competition Law.

“But it’s something that I think we’ve got to challenge, because we have governance around what we can and can’t do to protect consumers in terms of pricing and in terms of warranties.

“And yet we have a situation here right now, where seemingly we’re all looking at each other (asking ourselves) what can we do?”

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