Toyota Offers to Buy Back Rusty Tacomas

[Brian R.]

NYTimes
May 7, 2008, 1:33 pm
By Christopher Jensen

"In a program that covers 813,000 trucks and could cost almost $100 million, Toyota is offering to buy back 1995-2000 Tacoma pickups with frames so badly rusted that they cannot be repaired.

The automaker is also extending the warranty on those frames from the normal three years or 36,000 miles to 15 years (from the time they were new) and unlimited mileage.

On the buybacks, Toyota will pay 1.5 times the suggested retail price for a vehicle in excellent condition as calculated by Kelley Blue Book.

The program is good for consumers because Toyota is willing to not just buy back vehicles, but to pay much more than book value, said Clarence Ditlow, the executive director of the Center for Auto Safety. “Traditionally, when manufacturers have bought back older vehicles they have used the Kelley Blue Book straight price,” Mr. Ditlow said. “Taking care of customers is how Toyota gets to No. 1.”

Toyota began sending letters to Tacoma owners in March, and the mailings were expected to take several months. That letter says Toyota dealers will inspect the frame at no charge.

The Tacomas were built at the New United Motor Manufacturing plant in Fremont, Calif., which is a joint venture started in 1984 by Toyota and General Motors.

“These vehicles may not have been properly treated in the plant with the undercoating that they use,” said Sam Butto, a Toyota spokesman.

Mr. Butto said he was not sure how much the program would cost, but it is “among the most aggressive programs we have put together in trying to take care of our customers.”

He said the automaker expected that a small number of vehicles will have such a serious rust problem that Toyota has to buy them back.

But if, say, 2 percent of those 813,000 Tacomas were bought back and the repurchase cost was only about $5,800 (for a basic 1995 two-wheel drive Tacoma with the 4-cylinder engine and 140,000 miles) that would amount to about $94 million.

“I don’t see how this is going to cost Toyota less than $100 million,” Mr. Ditlow said.

Wade Hoyt, a Toyota spokesman, said the company is not “comfortable” with such estimates because of the “large number of assumptions.”

Toyota’s decision is likely to please many Tacoma owners and reassure the owners of other Toyota vehicles that the company stands behind its vehicles. But those who no longer have their vehicles are not eligible for the program, Mr. Butto said.

That may irk some former owners, who had rust problems, sought help from Toyota and were rebuffed.

One of those is Matt Pobieglo of Chattanooga, Tenn. Mr. Pobliego said he lost thousands of dollars in trade-in after the frame of his 1998 Tacoma rusted so badly he was afraid to drive it. Toyota recently offered him $675 because he no longer owned the vehicle, he said.

“The whole thing has been a mess,” said Mr. Pobieglo, who now drives a Nissan. “To me it is just corporate irresponsibility.”

Owners who can prove they lost money due to rusting frames should be compensated, Mr. Ditlow said. “Simply because you had the corrosion appear sooner than later should not disqualify you,” he said.

Tacoma owners who paid to have a rusty frame repaired and still own the vehicle can ask for compensation by calling Toyota at (888) 270-9371.

Toyota documents about the recall, including internal memos, were posted earlier this week at the Center for Auto Safety’s Web site at www.autosafety.org."