TN IS250

Hey everybody,

New to the forum. I don't actually have the IS250 yet, but I'm planning on picking one up before the end of the year. I had a quick question and I didn't see a newbie section, so I hope it's ok that I posted here.

I'm looking to get an IS250RWD and I'm debating whether to go now and try and get a deal on an '08 or wait and see what invoice price will be for the '09s.

My question is, how realistic is 0% financing? I have above excellent credit and I absolutely refuse to pay interest on a vehicle. This is one of the reasons I was debating on waiting for a 2009. Isn't the "December to Remember" deal's big thing 0% financing?

I saw the thread about what kind of price deals everyone received, but no one really seemed to be mentioning financing....

I appreciate any help! Hopefully before too long I'll be a daily visitor here

Evil Teo

iTrader: (13)

i dont think that is realistic unless u gonna pay in full in a year or 2 or less. i could be wrong but good luck with ur purchase. wait for the 09 to come out then u can compare which one but i would recommend the 09 because of certain changes to the car. we will see in september.

tqlla3k

iTrader: (1)

From a resale standpoint... the 09 is the better purchase due to noticable appearance changes.

Evitzee

There is no such thing as 0% financing from Lexus Financial. Zero percent financing are for companies that are in distress and need to move iron, like GM, Ford, Chrysler. Unless you can get free financing from somewhere else, or save up and pay cash for it, it looks like you won't be driving a Lexus.

Don't know why you refuse to pay finance charges on a vehicle. Desirable items in life, like a Lexus, don't come for free.

TN IS250

Ok, I appreciate the advice. If there are noticeable differences, I think I'll more likely lean toward the '09.

Just out of curiosity.....what does the "December to Remember" deal offer if not better financing?

meefer

iTrader: (8)

Better is relative - 0% is almost impossible on a Lexus. I have never heard of such a deal being done, but you never know with the sagging economy.

If you want 0% and a car in this class, the best you can do is probably a CTS, I think they are clearing out the 2008 models.

Now it just depends which one is stronger, desire for the Lexus or refusal to pay interest =) Best of luck regardless.

CAIFAN_64

iTrader: (1)

there is a thread about financing rates, do a search. The best rate I have heard of from Lexus financial is 4%. If you want 0% go to a ford dealership

Omnivor

Aren't they offering 2.9% over 48 months for the current event? I actually had a similar question, wondering what kind of offers the December to Remember events have historically given. It's supposed to be a great time to buy, why I could never figure out exactly why, beyond the general want to finish the year strong. Like do dealers get incentives? Would it be fairly easy to get invoice when buying then?

katwoman

In the D.C. area you can get 2.9 % financing for 48 mos. Forget what it is after that.

I'm confused about something and need some help understanding financing. I'm buying a car in a couple of days and need to figure out what "2.9 % over 48 months with no penalty for paying off the loan early" really means. I worry that the interest is front-end loaded and that I won't be getting such a good deal after all if I pay off, say after 4 years. I fortunately could pay cash, but if this is as good as it sounds, I'd rather finance. Does anyone really understand how this works?
How could the bank make money this way?

Thanks....

Joanna aka katwoman

Omnivor

The interest is definitely front-loaded. For example, if you finance $20k at 2.9% over 4 years, your total interest is expected to be about $1,200 over the entire term, but at 12 months, you would've paid over $500 in interest already, and at 24 months, almost $900. Your monthly payments stay the same, but initially, a larger portion of your monthly payments go towards the interest. Using the same example, with your first payment of roughly $440, $48 of it is going to interest, whereas on your final payment, only $2 is going to interest. Of course, part of that is because at the beginning of your term, you owe $20k whereas at the end, you only owe $440, but you do pay most of the interest early in the term.

There is no "penalty" for paying off early, as in if you can pay off the entire remaining principal at any given time, then that's all you have to pay to get out of the loan. But naturally, any and all interest you paid up until that point is "lost."

sirkfc

I don't agree that 0% is impossible on a Lexus. If you think about how high Toyota was flying 18 months ago, if they didn't plan properly for the economic mess that came, they might have some major capacity issues. While they might have plenty of cash to ride out the storm, cash is not an income statment item, while operating results are, so there's still a lot of pressure from Wall St. to move units as long as incremental profits are positive. By delivering a vehicle, you get to book all the revenue and profits NOW, while amortize the below market rate interest over the years of the term, when hopefully the market has recovered and you can mask it.

In any case, even if the number is actually not 0%, they might just offer a rebate incentive to the dealer so that the price you end up paying is basically the same as 0% financing had the rebate not existed. There are many different approaches to moving the cars. Either motivate the consumer through 0% financing or dealer via rebates. Right now, I'm not sure who's more reliable to pay back the financial services, as consumers have no money and dealers must be hurting really badly with their overhead and competition.

katwoman

Thanks, for the prompt reply. I still feel like there is a piece of the puzzle missing. Since it's easy to earn at least 4 per cent on your money these days, why would you NOT want to finance at 2.9%?

I'm really new to this. Does Lexus pay the lender, which then makes it worthwhile for the lender to "lose money" on each loan? So in essence, Lexus is giving us a "rebate" through the financing?

Evitzee

There are many pieces to the equation. A company looks at the overall picture and may decide it is worthwhile financially to offer low interest rates, or cut rate prices to keep production moving.

Japanese manufacturers don't like to cut prices as it cheapens the product in consumers eyes (think GM, Ford), and hurts resale prices. Low interest rates don't have such a negative image.

Sure, it is easy to earn 4% in a savings account. After tax you net about 3%, the same as the cut rate financing. So it is a wash. Some people don't like to finance, some have to.