Hi there, we will be purchasing a 2019 ES 350. Although we are cash buyers, Lexus Financial is currently offering 1.99% loan on some CPOs. Any feedback on customer service, hidden fees, or things to be aware of? Thanks!

 

Financed a portion of my wife's RX with them back in 17. Paid it off in 20 and had the title in my possession within a few weeks. No issues.

 

My question to you would be if you have the cash to buy the car why pay Lexus interest?

 

Good question! But we were considering the 1.99% Lexus loan since interest rates are going to be so much higher. But since I'm not familiar with car loans, my biggest concern is being surprised by other fees and strings attached.

 

Depends on your inflation expectations. If you expect the value of your money to decline more than 2% a year, you'll actually pay less in real dollars by delaying your payment in exchange for paying the interest.

 

I financed mine through Lexus finalcial & got a 2.5 - 3.0% reduction in the rates compared to the current bank rates (or an off make dealer).

No issues here either.

We were approved before the paperwork was finished during purchase.

 

See Doug DeMuro's Youtube video on why you shouldn't pay cash for a vehicle (at least a decent-large amount, whatever that means to you). I agree for the most part.

You are (most of the time) (not financial advise) better off investing that capital into let's say an S&P 500 index fund rather than paying a lump sum of cash for a vehicle. This holds especially true during periods of high inflation. As long as you can make more than 2% with your capital in this case, you are better off investing. If you don't believe you can make 2% or more than pay the cash however you would still loose with inflation over time.

As always DYOR Do Your Own Research.

 

Assuming you have a good/excellent credit score and documentable financial means to make the car payments, loan application and approval is speedy and hassle free. In my case I took advantage of Lexus Financial Service's (LFS) 0% interest rate and the whole process of filling in the loan application and subsequent approval took less than an hour. Pretty straight forward terms - no hidden or extra fees or early payment penalties - just cost of car plus state taxes and fees divided by number of monthly payments = monthly payment.

A couple of things to be aware of:

1. Your credit score may take a significant dip due to the fact of a significant loan amount has been added to your credit report without any loan payment history.

2. You have to option of creating an online LFS account and using the web or a smart phone/tablet app for such things as account monitoring, management, and making payments. Just be aware signing up for an online account automatically enrolls you in the paperless account option - instead of using snail mail, e-mail is used for the routine monthly payment correspondence. (In the case of automatic payments, it is just a notification the payment is being processed and the transaction amount.)

As to LFS customer service, never had a reason to contact them. I suppose one could state a company whose operations run so well that you never have to contact customer service has the best ever customer service.

 

I’ve financed two vehicles with Lexus Financial and have had no issues so far. They are pretty much straight forward. I was pre approved through another lender at great rates both times for two 2019’s and Lexus Financial was able to offer me an even lower better rate both times. The second loan was even smoother than the first loan.

 

Lexus Finanacial or any other lending institution is not in the business of giving out 0% interest or very low interest rates for extended periods of time and lose money. If they gave these low rates they were not discounting the vehicle as much. It today's crazy world with dealers not discounting it just might not be a bad idea to look at this.

 

If it was me, I'd take the money from Lexus at 1.99% , and buy series I bonds from the Treasury Direct.

Currently 9.62%, and is indexed to inflation., so the rate will be going up at least once more most likely.

They must be bought from Treasury Direct, and your limited to 10K per person, per year.

https://www.treasurydirect.gov/indiv...esandterms.htm

 

We also financed two EShs through Lexus Financial with low rates with no issues.

I would finance at 1.9 for 60 months and invest the cash in a heartbeat. If you don't want to invest in stocks now, or believe rates will go higher, short term rates are getting much better. Bought Treasuries for a work account a couple of weeks ago that mature in December, at 2.12% (now yield is slightly higher), and yesterday was quoted 2.0% by my broker for a FDIC insured CD maturing in December. While not much of a spread above the Lexus rate, the risk free yield of five year treasuries this morning looks to be around 3.3%.

I Bonds mentioned above are also a good alternative.

 

With interest rates being so low, and the stock market fluctuating, to me it's a wash between taking the loan (and lowering your FICO score) and paying cash. Couple this with the satisfaction that YOU OWN the car and are NOT IN DEBT to anyone, and my opinion is buy the car for cash and enjoy your new non financed vehicle. GOOD LUCK with whatever you decide because, as previously stated, it's really 6 of one and a half dozen of other...

 

i have 3 paid as agreed closed accounts w/ lexus financial. all smooth sailing!

 

December to Remember promotion with 1.9 percent (in USA) is sadly over and now the best they’re offering is 5.49 on some models and higher on the rest.

Paid cash for my ESh but have financed two other cars with Toyota Finance which went fine and was sent the title to both promptly after they were paid off.