According to Toyota's Open Road blog, Magnussen’s Toyota in Palo Alto, California was "doing what Toyota encourages its dealers to do:" Take customers' money. The Silicon Valley dealership had apparently been deluged with requests for a plug-in Prius hybrid; knowing Toyota was working on such a vehicle, Magnussen's decided to take "deposits" for plug-in Prii, despite the fact that Toyota had not yet announced any timetable for retail sales. Irv Miller, Toyota VP of Corporate Communications, then attempted to spin away Magnussen's shady business practices as a simple case of a dealer trying to make its customers happy. Some choice quotes after the jump.
A lot of people can’t wait to try [the plug-in Prius], so it’s understandable that one of our dealers created some confusion recently by taking deposits on future Prius plug-in hybrids. Magnussen’s Toyota in Palo Alto, California was doing what we’ve always encouraged our dealers to do...to listen carefully to their customers and try to meet their needs. Being so close to Silicon Valley, the dealership was getting lots of requests from customers who wanted to buy a plug-in Prius. And since the dealership had confidence Toyota would eventually deliver a great vehicle, they thought it would be a good idea to take deposits and make customers happy. So, while we applaud Magnuessen’s excitement about our future Prius plug-in, we want to be clear that we have not announced a timetable for retail sales.
Jalopnik Snap Judgment: Since one or two of us have done tours of duty in the hallowed halls of America's car dealerships, we know that cash money is God there. Faced with customers demanding something that didn't exist, but that the dealer knew would most likely soon exist, Magnussen's did what any money-grubbing auto retailer would have done: they charged folks to get on "the list." Shady? Yeah. Surprising? Not in the least. It's common knowledge that a customer who has left a deposit on something, no matter how small, is much more likely to return to complete the transaction — any transaction. The simple rule of thumb to follow is "don't put a deposit on something that doesn't yet exist." Even...or especially...at a car dealership. Incidentally, Magnussen's also agreed to return all customer deposits for plug-in Priuses, but we wonder how much thumb-twisting on Toyota's part was involved before they agreed to relinquish their precious cash. [Toyota Open Road Blog]