Toyota Financial Services announced on July 21 a new program that allows Toyota and Lexus dealers to buy off-lease vehicles online three to five days after the vehicles are turned in by lessees.

The new Web-based program, called Toyota Dealer Direct, or Lexus Dealer Direct, alerts the captive finance company that the lease vehicle has been turned in and gives the dealership that accepts it first chance to buy it at a fixed price. If the dealer passes it up, the vehicle goes to an online auction for participating Toyota or Lexus dealers.

The program was tested in May 2003, with 50 dealers in Southern California and is now available nationwide. According to Kent Pace, national remarketing manager at Toyota Financial, the program streamlines the remarketing process for Toyota Financial and its dealers. Vehicles sold through the Dealer Direct programs save dealers the buyer’s fee charged by regular auctions and save Toyota the cost of transporting them to an auction. He added that the programs also save time and depreciation, since it takes about 35 days for an off-lease vehicle to make it across the auction block at a brick-and-mortar auction.

Pace says the program works this way: Once a lessee turns in a vehicle, a dealership employee goes into the Dealer Direct Website and enters the VIN number. This triggers a vehicle inspection, usually within 48 hours, at which time digital photos are taken. The vehicle is then priced and offered to the dealership that accepted it. If the dealership declines, the vehicle electronically moves into the next day’s online auction. The next morning, all dealerships can view available vehicles online, with photos and condition reports. At mid-day, Toyota Financial holds a two-hour online auction to sell those vehicles.