First-time buyer finance question

Not a lease question but this community will certainly be my best bet. A friend of mine walked into a Lexus dealer looking to finance a new car. They pulled his credit and it came back as a 760. However, he’s a first time buyer and they asked for a 50% down payment which sounds just crazy. Could anyone please confirm this is not correct? What kind of down payment, if any, is required to finance through Lexus Financial?

That’s stupider than the 2020 Racing Point, sorry I mean Mercedes Jr. car.

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No mainstream bank or manufacturer has a standard down payment requirement like that, whereby “you can’t finance brand X unless you put Y% down”.

If your credit and income are good it should be no problem to finance with minimal down payment. A 50% down payment requirement sounds ridiculous, tell your friend to call another Lexus dealer.

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Or finance thru another bank/credit union. Though that way leads to more paperwork.

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Things like this get said in dealerships constantly and it’s almost always because the salesman talked to the sales manager who talked to the finance manager and somewhere in the game of telephone, things get mixed up. The other option is that explaining how credit works to someone is a little bit of work and telling him to go away makes it easier to get to the next customer. Plenty of folks in this business suck.

It sounds like your friend has a reasonable FICO score, but his bureau is light, meaning he has no real credit history. Luxury dealers see this all the time. Young people who are making their first major purchase, or older people who have always had enough money to purchase things outright. I’ve seen people with 6-figure salaries and 750+ credit scores get turned down. If your friend is using his credit cards regularly and making his payments on time, he’ll eventually have a decent credit history, but for his first car, he should probably be willing to bite the bullet and put down a sizable chunk of cash.

That being said, no one will ask for 50% down and he will likely have better luck at a local bank. They may still ask for some money down, but I’d venture 10-20% would be enough to placate them, versus the massive outlay the dealership wanted.

Either way, he’s better off giving his business to someone who is willing to work with him. Wish him the best of luck!

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How can you say this w/o even knowing how much the OP’s friend makes or what car he is trying to buy? If he makes $50k/yr and is trying to buy a LC500, you bet the financing company will require at least 50% down.

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No, you’re right. The third possibility is that OP’s friend is unrealistic in his expectations. I guess I was giving OP the benefit of the doubt. But it’s not reasonable for me to make a blanket statement like that without knowing all the facts.

My friend is making 60k+ per year and looking at a NX (~40k). He does use his credit cards and has been perfect with payment history. Never had an auto loan or lease thought. Will definitely be shopping with his credit union and seeing what other dealers are willing to do.

:rofl: Nothing beats Daddy $troll’s Tracing Points

Is it up to the dealers discretion to ask for whatever percent down that they think will get the bank to fund the deal?

And there it is. Dealer has absolutely no reason to lie about down payment requirements. Creditors are getting tighter and pickier with requirements due to covid. If your “friend” has short job history or the type of job that can easily be laid off, could be another contributor to the requirement.


There is no reason to make your friend pay more than 10%, 15% should be more than enough, I was first time buyer when I bought my first car in 2016, my credit age was 12 months only with income of $2500 per month and one $500 secured credit card, I put 25% down because I wanted to and I negotiated APR from 4.99% on 3Y loan to a 0% APR, at the time, everyone I know couldn’t believe I got the deal, I had to show my statement to close friends to believe that.

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Dealers don’t care how much someone puts down as long as they are qualified for funding and the deal goes through.

Is “your friendl” applying for a 36/48/60/72 month loan? That can affect the down payment requirement amount too.

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60 month loan

No. It’s up to the lender. But that information will be relayed to your friend via the dealer.

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I get looking at credit unions but different dealers won’t make a difference. They don’t benefit if you put more down, it’s actually the opposite.

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