lexusity

I recently heard of someone who said the intentionally got financing at 3.9% to get a better deal and then pay off the Lexus ES350 a month later. Is this common? I don't have that much money to throw around....

bc6152

Only you can decide which way to go. You must compare; financing thru a credit union with automatic deductions at a lesser rate, financing thru the dealer depending on the deal you make, a retail bank if they are lower. You must research all the avenues of financing and decide which is the least expensive. Your description is certainly possible. One can pay off their loan anytime.
My credit union is currently offering new car loans at 2.49%...

Arty101

A coworker bought a Honda this weekend doing that. He said he got a $750 credit after negotiations with no prepayment penalty. He plans to pay it off after one month.

flowrider

iTrader: (9)

I've never done it on my Lexus, but in the last two years I've done it 3 times. The first time was for my truck, then I bought a 2012 Toyota Corolla for my son, and a couple of month's ago I bought a 2013 Kia Rio for my granddaughter. In all three cases, I got a Financing Bonus - Price Reduction. And, in all cases I paid off the loan before the first payment was due.

Lou

Arty101

Lexusity- why do you care now? You already got your ES350.

markwill12

I, too, am interested in this (new to this forum by the way - hi!!). I am in the market for an ES 300h. I am able to pay in full in cash but understand that isn't exactly attractive to a dealer. My plan was to negotiate on price (before tax, title and license) first. Only then, when we have hopefully agreed on that, do I plan to disclose that I will pay in cash.

However, based on the premise of this thread I am now wondering if my response should be something along the lines of "I'll be paying with cash, unless you have a great financing deal to offer me".

Honestly, "great" would only be interest free, which I know isn't likely. Anything else just isn't worth the hassle to me - BUT if I can get a better deal because I finance and then pay the whole thing off immediately then perhaps it's worth it.

So, this all boils down to whether there really are any benefits with financing. If so, how would I allow the dealer the chance to improve the offer - if I have already agreed a price.

Anyway, interested in the mechanics of how to make this work and if it's worthwhile.

Thanks.

Mark

Arty101

My coworker was in the same situation. He asked the sales person if financing thru them would lower the price. This was part of his negotiation strategy. Anything to lower his price. They were honest and said yes. I think the financing arm is independent of the sales and helped subsidize the deal.

Fly4u

A financing bonus or incentive was never offered to me, and the negotiations were comprehensive, relaxed, but lengthy. I had always planned to pay cash and didn't divulge that fact until the package of purchase price and trade was completed. The only effort to steer me into financing was during the traditional "finance office" paperwork session. There were several low interest plans, but no mention of what the original OP suggested.

An interesting method of shaving a few hundred dollars from the deal was to significantly devalue both the purchase price and trade - the net effect was to reduce the taxable yield of the sale.

Braindrain

Not sure what Lexus US offers but up in Canada, I got the financing reduced to 0%.

It was 2.4% over 36 months with every $1K downpayment (including trade in) lowering the finance rate by 0.1%.

Although I could pay it cash, I brought it down to 0% and figure I can use the cash for investments.

I think it's the same for the US...