sk52

I went in to purchase a 2010 CPO RX 350 27k miles with nav premium and comfort pkg.
They offered lexus luxury care warranty 5 year / 100,000 miles for $3095. What are your thoughts on this?

She basically said it covers tire replacements, whether they get worn out or unexpected bubbles/flats as well as dents and dings on the car. Car tires were rated a 8/10 and have approximately 20k miles left on it. Does anyone know if luxury care also covers regular service?
The financing rate I got was 2.9% pending approval on an address confirmation.
She said that she may be able to drop a point off if I add this warranty.
Does that mean there's room to negotiate a better apr? She was telling me I was getting many rejections without income verification and no car loan history so made it seem I am lucky to get this one approval.. This is my parents first car purchase from a dealership.

corradoMR2

I've seen in some other posts with other Lexus models that Luxury Care takes care of regular service. If it does, it may make sense if you plan on keeping it 5 years/100K miles:

Tires: 800$
Oil changes: about 15 remain at every 5K miles x 80$ = $1200
$2K just these two.

Add all other maintenance trips in between to change brake fluid, air filter, cabin filter, etc, and it could easily tip over 3K. This is of course if you plan on taking your RX to Lexus for maintenance. If you go to Toyota (which you can) for instance, it'll be cheaper.

To be sure, ask the dealer to clearly list what's NOT included and under what circumstances, which tends to be the bigger surprise versus what is included.

Cruiter

Not counting warranty work that has to be done by Lexus but just service, you can have that done anywhere including Toyota (if you choose) for a fraction of what Lexus charges. And it may not include that anyway. The tires depending on the brand should be in the range of $1,000 to $1200 a set mounted and balanced. Michelin's in the Lattitude 19" series will give most folks about 38-42,000 miles. If that's all it covers including a few touch up's, I wouldn't but it's your money. If it takes points off your loan, then you have to figure it's loaded with profit, right ???

LexRexBlue

The RX is a pretty durable car. Unlike the IS the tires seem to weather rough roads and isn't nearly as susceptible to dings, although I did purchase ding insurance. You'll have to assess all the features to determine if its worth it. It also may depend where you drive. NY and Hoboken have many potholes!!!

tfischer

Wow!
"Tires: 800$
Oil changes: about 15 remain at every 5K miles x 80$ = $1200
$2K just these two."
It's a good thing the dealership does not know about those price, or surely the price for this pre-paid service package would be higher.

hadokenuh

I wouldn't buy it. Just pay as you go.

Also next time, get pre-approved loan from your local credit union before you go to the dealership.

tfischer

It looks to me like you are overreaching. Next time (or even this time) save up some money before you go to the dealership, and just buy the car - it's still the least expensive way, and you know you are getting a car that you can afford.

sk52

She added the warranty to the deal for 6 year/100,000 miles at $3290 + tax. She said my 2.9% rate is contingent upon getting this warranty, if I do not, I do not get approved for financing at all.
But she also added that I may cancel the warranty and get a pro-rated refund.

Warranty does not cover service, just tires and dings. so basically I feel like I'm losing $1700 if I am just changing the tire sets two times in 6 years, but in order to get the 2.9% rate I will have to take it. But I can cancel the warranty.

I don't know much about credit unions at all. I know people turn to them when they are receiving much higher interest rates at 5%+

I have the cash at hand but if I get a good financing rate (2.9% or lower) the cash would be put to better use elsewhere.
If I were to accept this financing deal, would I be able to check out credit unions after the fact and see if they offer better rates than 2.9%? I am asking, is it possible to pay off this loan immediately, and apply for another one? Or would that not pass as a loan for the car, but a personal loan?

Thanks for the help.
I am going back to the dealership in 30 minutes to sign this.

tfischer

"She added the warranty to the deal for 6 year/100,000 miles at $3290 + tax. She said my 2.9% rate is contingent upon getting this warranty, if I do not, I do not get approved for financing at all."
First of all, it's not a warranty.
Secondly, that tying arrangement is probably illegal.
Third, she is playing you like a violin.
On the other hand, you are getting a swell car.

seanlin

Dont buy anything that you are sure you will cancel later. It is always a big pain to try to get money back from someone.

You need to read the agreement very carefully, $3200 sounds like +10% cost of the CPO car that you plan to get. I am not aware of any maintenance service cover tire replacement. Even BMW new car 4 years free maintenance doesn't cover tires.

hadokenuh

If you have not done the deal, great! You should feel good about coming here for advice before signing the deal.

1. Shopping your rates from credit unions will give you the idea of what a good rate would be for you. If the dealership can beat it, great. If not, use your pre-approved rate. PenFed has been recommended by most car forums: https://www.penfed.org/Auto-Loans-Overview/ . You can get their approval within minutes.

From your original post, it's not clear weather you or your parents are buying the vehicle. But I can imagine if some one has a score of 720 or more and good credit history, he/she will be qualified for the best rate, which is 1.99% at the moment.

2. Someone has mentioned before, tying extended warranty or service contract to APRs is illegal in some states and shady at best. Bottom line, it's just profits to the dealership. You are getting shafted by the 3K add-ons. It feels like they are doing you a favor. They are not.

3. Do not take their words for anything. Just read the contract. If they say something is refundable, ask them where it says so. If you don't do this, it will become your words vs. her words later which will be on their favor because you will have signed the contract by then.

jeffreyr

Actually, the best rate at the moment through Lexus is 0.9% over 48 months, through the end of the month. I just got this rate on my 2010 CPO purchase a couple of weeks ago. Of course, it requires a good credit rating, but it is available.

OP, you're presumably paying a premium for the CPO coverage in the first place, and though this luxury care seemingly covers different items, I can't see spending another $3k for that. Seems excessive for too little in return.

I think you're getting good advice to be wary here. The dealer really seems like they're trying to take advantage of your situation. Good luck.

hadokenuh

I was referring to the PenFed rate of 1.99% but you are right, Lexus is offering 0.9% til July 1st.

bextreme1

Even on a new RX, tires are not covered by the Lexus warranty. It clearly states that they are covered by the tire manufacturer which means they are prorated. As far as I'm concerned, tire warranties are useless. You don't get much back for them. Also, as a CPO, you already have an extended warranty to 7 yrs. or 100k miles. This dealer is trying to rip you off. I would call lexus and talk to customer service and tell them what this woman is doing.

jeffreyr

To be clear, CPO warranty is 3 years/100,000 miles, stand-alone (that is, not tacked onto any remaining manufacturers warranty).