Toyota pulls plug on plug-in hybrid deposits

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Remember that Palo Alto Toyota dealer we told you about last week who was taking $500 deposits for a plug-in hybrid that’s not on the market yet?
Well, Toyota got wind of it and basically said: ‘Cut it out.’

But that isn’t stopping Toyota San Luis Obispo. Sales manager Matt Meyer said the dealership plans to keep taking deposits on plug-in hybrids as long as its customers are willing to plunk them down.

‘I’ve got a few people in town who wanted to come in and leave deposits’ on a plug-in hybrid, said Meyer, even though it could be ‘two years, five years or 10 years’ before the car actually goes on sale to the public. ‘I’m not going to tell them ‘No,’ because I don’t tell my customers ‘No.’ ‘

Meyer said he started taking the deposits to keep customers from driving north to pay $500 to get on the waiting list at Magnussen’s Toyota of Palo Alto. It was the Silicon Valley dealership’s deposit program that originally attracted the attention of the automaker.

‘We asked the folks at Magnussen to back off a little bit,’ Toyota spokesman Irv Miller said. ‘Let us get our product to market and figure out where we’re going with it before we start putting the cart in front of the horse.’

Eric Doebert, business development manager at Magnussen’s, said the dealership will refund the deposits of the 25 or so customers who had paid them. The deposit program has been replaced by a non-paying waiting list, which has grown to 44 people.

‘There is a lot of uncertainty at this time’ about when the cars will actually be available to the public, Doebert said, and Toyota ‘asked us to return the deposits in everyone’s best interests.’

Miller, who wrote about the issue on Toyota’s Open Road blog, said the automaker hadn’t received any complaints about the Palo Alto deposit program. Told that the San Luis Obispo dealer was running a similar program, Miller said he would look into the matter.

The practice doesn’t sit well with Sacramento consumer advocate Rosemary Shahan.

‘$500 tied up indefinitely? Sounds like a boondoggle to me,’ Shahan said. ‘It’s like making an interest-free loan to the dealer.’

Toyota has announced plans to begin delivering plug-in hybrids to corporate and municipal fleet operators by the end of next year as part of what will eventually be an extensive road-test. The automaker hasn’t said when the cars, prized for their anticipated ability to travel up to 10 miles on electric power alone, will actually be in showrooms.

Doebert said last week that the dealership started the deposit program because it was getting so many inquiries from its Silicon Valley-area customers. Both Doebert and Meyer said the deposits were accepted with the understanding that customers could get their money back at any time if they got tired of waiting for the plug-in hybrids to materialize.

And if Toyota asks the folks in San Luis Obispo to cease and desist? ‘That would be a call the dealer would make, not me,’ Meyer said.

-- Martin Zimmerman