2020 GX 460 Premium or Luxury

So We have not leased before and we are looking to pick up a good lease on 2020 Lexus GX 460 (Premium or Lux). As it stands now, our credit score sits in 620s (not our average score though. Mostly we stay in 700s. Just a temporary drop due to recent high utilization). We have history of on time payments and i have very stable salary. We reside in Alabama. I‘ve been talking to in-state and out-of-state dealers, put in an app with a dealer and got this back after he says he got us a good deal due to our low credit scores and $0 down on Prem/Lux model (rounded to the nearest 100)

MSRP 58K/65K

MF 0.002/0.0012

Down payment: $0 with either trim
Rebates/Incentive: $1250 lease cash plus first payment of upto $700 on both trims

Residual: $31.5K/$41.5K

Mileage: 7.5K on both

Monthly payment: $665/800

Good deal or not?

Any recommendations will be greatly appreciated

Give us more info instead of giving us homework…

What’s your selling price pre incentives?
How many months are you leasing?
Tax rate?
What’s Edmunds MF/RV for each trim?
Your current score is tier 3 territory. Did they tell you what you qualified for?

As of now, they do not have the Premium that we are looking for in stock, so they cannot given me a figure. The deal I am getting for Luxury trim is as follows:

MSRP: $68,600
Sale price: $63,600
RV: $41,160 (he is basing it off MSRP)
RV: 60%
MF: .0012 (they are saying they got my tier bumped to tier 1 to get me that MF since I pay my bills on time, despite being a Tier 3 customer with credit score in 620s)
State lease tax: 1.5% of the gross proceed of lease
Down payment: $0

Incentives: Included in sale price. May get another $1,000 off since I am a new grad within past 2 years

Lease length: 36 months
Lease annual mileage: 7,500 per year

Final dealer offer as of now: $799/month with $0 down for 36 months for the Luxury trim

Side note: Is it safe to assume that since they already pulled my credit and submitted to Lexus Financial Services that any dealer I go to will also give me the same rate since I’ve already been submitted to LFS and not a better rate?

You need a much stronger discount pre incentive.

Not necessarily since dealers can bump MF as profit. You should ask for base MF at any dealer. Is .0012 base? You should’ve got that info from Edmunds already.

After doing a search on Edmunds, it seems that .0012 seems to be what everyone is generally getting. And pardon if I miss out anything. I (or anyone in my family) have not leased a vehicle before so I’ve only got a handful of resources at my disposal (this forum included)

Given my credit scores and $0 down payment, what kind of package & payment (ballpark) should I be looking at if the lease if for 36 months with 7.5K per year for PREM and LUX trims? I understand the credit score is lower than what I would like it to be and we may end up paying a little bit more, but we just don’t want to be paying arms and legs for the vehicle compare to other buyers (affordability is not the issue here).

Target 10% off before incentives and push for the best money factor and residual you qualify for.

So you’ll want to target a sale price of $61740 before dealer incentives like loyalty, new grad, or monthly sales specials.

Just as an aside, why as new grads with bad credit are you considering dropping nearly $30k on a Lexus lease?

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Thanks for your input. Appreciate it. What, here, would a good RV and MF mean? A high RV and MF lower than .0012?

To answer your last point, we actually need a SUV at the moment and have narrowed it down to GX (both of us like it). We’d rather spend the dollar on an SUV that we like and will keep than trying to swap out again and again

Man that’s a lot of money for a decade old suv

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You’ll want to create an account and post at Edmunds asking for residual, money factor, and incentives for 36months / 7.5k yr

They will respond with the base rates so you can tell if they are marking up your rate or not and giving you the “bones” of the deal so you can use the lease calculator and check their math.

The RV is what Edmunds says and isn’t negotiable. It’s the MF that changes and you want to get base or as close as possible given your credit. Work on the selling price.

Your next step from here is go and read Leasing 101 on this site.

You need to ask those guys on Edmunds with your zip code. Lexus MF is regional and also based on the trim.

This is what I got back from Edmunds on 2020 GX460 Prem/Lux trims

.00110 and 63% / 60% for Prem / Lux
$1250 lease cash

So not much has changed. We found a small bump in MF, nothing to write home about.

You just need to get the discount down, add the incentives afterwards and you’ll be good to go. Shop around and see if there are any other dealers looking to move that car more than the next guy. It can be the difference between a good deal and a great one.

Thank you so much for your help and thank you everyone else.

How big of a role credit scores play in all of this? My take on it is that if the dealer got us bumped to tier 1 (.0012 MF), then they shouldn’t have in issue giving us lower monthly payment and more for the package

And another thing is that a lot dealers will not entertain working on the price and payments until i put in my app and let them run my credit, something i am hesitant about to get all of those hard pulls from different dealers.

From what i’ve been told by different dealers is that they said “we can only offer same rate as so and so because we also use LFS that they got you approved for so we cannot deviate from that” so i am not sure how much more beneficial it is to put in an app

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Having a higher credit score will make getting the best money factor easier. Money factor is annual percentage rate presented differently. You can multiply the money factor by 2400 and get the APR.

For example:

It looks like the base rate is a money factor of 0.011 which amounts to a 2.64% APR

They are quoting you a money factor between 0.012 (2.88%) and 0.002 (4.8%).

So the gold standard would be:

Sale price: $60490
MF: 0.011 (2.64% APR)
Residual: 54%
Down payment: $0

Considering this car is going to depreciate 46% during the lease term with only 7.5k miles / year you may be better served looking for a better vehicle to lease. The higher the residual and the lower the money factor, the better the deal. That’s why people love leasing Toyota Tacomas because they have 75%+ residuals due to their high resale value. Good luck.

The dealership will probably try to give you as much APR as possible given your credit so buyer beware. Don’t fall in love with a payment online with the base quote or the low end of their quote, get emotionally attached to the deal, and end up getting pumped at the dealership.

This is a standard sales tactic, a credit app is not required.

There are a lot of cheaper SUVs in that segment. However, if you are set on the Lexus try and get a bigger discount. $799 per month is a lot of money for only 7.5k miles.

You don’t have to worry about multiple hits on your credit when car shopping as long as it’s done within the same time period, usually about 14 days. The credit bureau will take it as you looking for the best rates and will only count it as 1 inquiry. Same goes when trying to get a mortgage. They will however appear on your report, but as I said it’s not uncommon when rate shopping and won’t hurt your score.

If you take a break, I’d suggest not putting in another application until you know for certain you’re ready to close a deal or else it’ll become multiple inquiries.