Hi all. I've lurked here for months pending a decision on a new car. It came down to the GS350 v BMW 528. This post is NOT about which car is better or the virtues of either one. It is about the fact that Lexus seems so non-competitive in leasing/buying. The dollar price of the cars were comparable but in the end, Lexus just couldn't (and/or won't) compete on financing rates (BMW was 0.9 for 60 months) for the GS and their lease price was through the roof. I went with buying the BMW. I thought both cars were phenomenal and would be happy with either. But I don't understand why, in this economy, Lexus is simply not competitive on lease or buy pricing. I went through the same experience 3 years ago in deciding between the GS vs. Infiniti M35x. Then too, Lexus was just not competitive with Infiniti leasing. Hope I've not offended anyone here with their purchase because again, I think the GS is a great vehicle.

 

It musts be region related. I went through the opposite thing in Houston. I actually test drove, and made an offer on a 535. The most they'd give me on a $55k car was $1400, plus a .9% financing. I didn't care for the .9% since I was paying cash, so it really was only $1400...in this economy, are you kidding me? I was going to try different dealers, but when I found out that you had to have run flats, and there's not even space in the trunk for a spare, it pretty closed the doors for me. Lexus on the other was very negotiable.

 

European cars always have better lease rates, and Lexus rather cut back on production than to give out hugh incentives.

 

^ Agree. You can't compare Lexus lease rates with MB, Bmw or even Infiniti - the latter will subsidize leases in way of low money factors and/or high residuals, to push cars off their lots. Lexus is conservative with MF & residuals that reflect the actual market. MB, Bmw & Infiniti will pay the piper when these cars are returned at lease end, since no one will be willing to buy these cars at their inflated residuals. . .

 

When one compares the "outright purchase" pricing, they are very competitive with BMW. When I looked at the 535 vs GS450h pricing, it was no contest, the 450h was cheaper. As KevGS460ML stated, BMW was not very willing to take their price down, where as I was able to knock off 5k from a limited production car. And no there weren't tons of them there, it was the only one.

 

yes, that observation is very much true, and unfortunately that's how lexus works and they are making decent money by controlling the supply.

the lease and finance on mb, bmw, audi, infiniti, they are all insane. they played with money factors, finance rate, as well as the residuals. while lexus, they control the supply to match up with demand (at least try to) so they stand stronger on the rates.

it's true that it's very much disadvantage especially to those who are leasing cars. a lot of times it's almost no brainers to go get other brands coz' it just doesn't make sense to pay couple 100s more on lexus when you don't own the car after 3 yrs.

i am surprised some regions dealerships are still tough on prices. here in socal it's so slow that bmw and mb are discounting even the amgs big time just to get you to sit down and talk

 

BMW doesn't actually have that much mark-up on their cars. It's kind of stupid really.


And as others said, Lexus residuals are actually what the car will be worth, which is why Lexus can happily keep leasing vehicles. They aren't taking a huge loss on them when they are turned in.

As for financing rates, why run specials on a GS? It's a niche car, and if someone wants it, they buy it. It's not like an ES or RX.

 

Well said...

 

ditto

 

I have to admit, my purchasing experience sucked at lexus. It was the worst of any car I looked at. Its why I looked for so long. I couldnt stand how resistant they are to any deal seeking or competetive pricing. They know their cars are desired and exclusive. I guess that one of the many reasons I liked the car for

 

In my case, it was ironic that I shopped Lexus vs BMW from a dealership with both franchises located about 500 yards from each other. The Lexus half wouldn't deal on financing and 1/2 hour later the Dr. Jekyl (BMW) side of the same dealership fought for my business with more competitive pricing + the BMW sponsored 0.9% financing & free maintenance. I know and appreciate that much of the marketing plan is pre-defined by the manufacturer but if you are someone such as myself, who liked both cars equally, the money factor made it a no brainer. Again, these are both phenomenal cars but in my case, all things being equal, $$ was the deciding factor.

 

I never thought of the GS as a niche car, so what does that make the LS, SC and the LS? What niche is the GS selling anyways?

 

The handling and power niche.

I know it's incomprehensible to you (and to me) that there are people out there who don't care about handling and power, but a lot of them exist. Same reason they build so few IS350's as opposed to IS250's.

The GS has, for the most, the exact same options as the ES, for $7K - $10K more expensive. All you get is handling and power.

When someone comes in for a GS, they are usually there for a GS. They don't usually look at other cars, or suddenly discover the GS. They are there because they want a GS.

 

I have to agree here my buying experience sucked for our lexus. But I also bought it at a Infinity dealer and when we were filling out the paperwork I saw that I only paid $600 over what they gave the guy on trade so that explains why it was pulling teeth to get anything. They were awesome up until it was time to actually finish the deal. Once it came down to the nitty gritty paper work no one would give us the time of day. It took 20mins to get a receipt of payment! They also wouldn't even put any gas in the car when it was on 0 miles to empty before I took it for a test drive. Then they only put 1/4 tank it. C'mon why can't you put a $40 tank of gas in a car I just paid $30K for. Sure $600 over what they gave the guy on trade isn't much margin but I'm sure they made quite a bit of margin on the new infinity the guy traded it in for.

 

What handling? The GS does not handle well for a sport sedan. The power is good, but the ES is almost as fast and the LS is faster, also, there are many other cars in the market that is just as fast and cost thousands less.
The GS and the ES may have similar options, but the quality is pretty far apart. Just about everything in the GS is one level above the qualilty of the ES.