Lexus Financing Deals

While Lexus isn’t a German car maker, it competes with brands like BMW and Mercedes in the luxury market. Lexus is the luxury division of Japan-based Toyota and is one of the newest car companies in the world, having produced its first car in 1989.

Despite being relatively new, Lexus has an advantage. The considerable size and might of Toyota and its research is funneled into Lexus vehicles. The most technologically advanced Lexus vehicle made to date was featured in the Marvel movie “Black Panther,” in which the superhero king rode on the roof of the Lexus LC 500 in a chase scene.

If you’re interested in getting a Lexus for yourself, continue reading. This article will cover the company, its financing, rebates, incentives and leasing that’s available through Lexus Financial Services, as well as alternatives.

About Lexus

For years, many car critics said Toyota lacked finesse and style. So Toyota decided to fill the gap. It invested six years and a billion dollars into the first Lexus.

Rumor has long been that the name Lexus stands for “luxury exports (to the) U.S.” Indeed, the brand was designed for the U.S. consumer market — it sold more than a million vehicles in the States before it sold its first car in Japan.

About Lexus Financing

Just as Lexus is a part of Toyota, Lexus Financial Services (LFS) is a division of Toyota Motor Credit Corporation. To qualify for Lexus financing, you generally must have good credit. But there is a program sponsored by Toyota called iFi designed to help customers with limited credit that may be available to Lexus customers who have at least a 610 FICO credit score.

Customer satisfaction for Lexus Financing seems to vary wildly. Lexus Financial Services was No. 2 out of 15 on the 2017 J.D. Power U.S. Consumer Financing Satisfaction Study for the luxury market. However, it’s rated with an “F” by the Better Business Bureau in part for its failure to respond to complaints.  

Financing directly through Lexus

Lexus Financial Services offers terms from one to seven years. It also offers pre-qualifications wherein you can apply for an auto loan without knowing the exact car you want to buy. You can read up on why it’s important to get pre-qualified here.

In addition to standard financing, Lexus offers a Preferred Option (Balloon) Finance Plan in Arkansas and Illinois. In a balloon finance plan, there are two phases. The first has small, relatively low payments for a set period, similar to a lease. This is the “string” of the balloon. The second phase requires the buyer to make a choice: either pay the rest of the vehicle’s remaining value in one large payment as cash (this is usually several thousands of dollars), finance that amount in a regular loan through LFS or sell the vehicle back to Lexus.

Whether you want the standard or “preferred” option, when you apply for credit, your application is categorized into a credit tier. The higher the tier, the more likely you are to receive a favorable loan offer. While your credit score is important to Lexus (and you can check your credit score for free here), your credit tier is based on a combination of things: credit history, down payment, loan term and value of the car you want.

Ask for a bump. If you don’t receive the best auto loan offer from LFS or any lender, you could ask for a tier bump. Reasons you deserve a tier bump might include high income, low debt, positive credit history or the down payment you’re making. You might not be able to get a tier bump, but it doesn’t hurt to ask.

Lexus rebates and incentives

Here are the main rebates and incentives Lexus offers and their requirements. These are often vehicle-specific and time-sensitive, so make sure the exact car you want has the rebate that you may qualify for.

  • Military Reward Program – For U.S. military personnel and their household members, including retirees and veterans within one year of retirement or discharge, there is a $750 reward that may be used toward financing or leasing a new Lexus.
  • College Grad – This $750 reward is for recent or soon-to-be college graduates. Eligible customers include those who will graduate within six months (or did graduate within two years) from an accredited two- or four-year college, technical college, vocational school or university. You must have proof that you are (or that you will be, within 120 days of signing for the vehicle) employed and able to make the car payments. You can often combine this with other incentives, but not all.
  • Lexus Cash – The availability of this depends on the market, the exact car and the time of year. But it can go up to $4,000. You often can’t combine it with other offers such as special financing.
  • Special Financing – Low-APR financing is available on select models for well-qualified buyers.
  • Loyalty Rewards – If you previously financed or leased a Lexus with Lexus Financial Services and you’re looking for a new one, there may be loyalty rewards available, such as a disposition fee waiver.
  • Business Solutions Finance Plans – Available on new, certified and used Lexus vehicles, terms for these plans go up to 84 months with competitive APRs. Small- to medium-sized businesses, plus sole proprietorships, are eligible.

This is not an exhaustive list of all Lexus rebates and incentives that may be available to you you. And it may not be an exhaustive explanation of all the requirements you may need to meet in order to qualify for Lexus rebates and incentives. See the Lexus website or a Lexus dealer for details.

Leasing from Lexus

Lexus lease terms can range from 24 to 60 months with mileage limits of 7,500 to 15,000 miles a year. All new and some certified pre-owned Lexus vehicles are eligible to be leased. There is an excess wear and use protection plan available for leases, which waives certain damages (up to a limit) when you turn in the vehicle. If you are about to turn in a leased vehicle, be sure to check out any promotional programs before handing over the keys as there are often loyalty rewards.

Here are three special lease programs Lexus offers in addition to the standard lease:

  • 1 Pay Lease Program – This is a single payment given at the time of lease signing for the entire amount of the lease. This payment is less than what you would pay over the life of a conventional lease. Yet it can still be quite large. Depending on the car, it may be 30% to 50% of the vehicle’s price, plus taxes and licensing. It’s available on both new and L/Certified (certified pre-owned) Lexus vehicles.
  • Low-Mileage Lease – If you don’t drive much at all, you could choose a lease with a low-mileage limit: 7,500, 10,000 or 12,000 miles a year on a 24- to 60-month new vehicle lease. The lower the mileage limit, the lower the cost of the lease.
  • Multiple Security Deposit Lease – If you make up to nine security deposits, your monthly lease payment can be reduced and the deposits refunded to you at the end of the lease.

For businesses looking to lease a Lexus, there are two plans available. Both offer flexible terms up to 60 months.

  • Open-End Lease Plan – With this plan, the end of the lease isn’t set in stone. You’ll have the option to end it within a certain time frame, instead of a specific day. There are no mileage restrictions and there are options to customize vehicles with equipment and paint (such as for a logo).
  • Closed-End Lease Plan – This is a standard lease with mileage limits and an exact lease termination date.

When the lease ends, you could lease a new Lexus car, buy the car you’ve been leasing or turn in the Lexus and buy a vehicle from a different manufacturer.

Alternatives to Lexus financing

Apply to multiple places for an auto loan so you can compare offers from lenders and choose which is best for you. It doesn’t hurt your credit to apply to multiple lenders within a 14-day window any more than it does to apply to one lender. Once you receive the offers, you may want to go with one with the lowest APR, with the shortest term or with the lowest payments. By applying to several, you’ll be able to take the one that suits you best.

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