2023 Lexus GX Finance or Cash

[watchnerd]

GX will go anywhere

Not really.

The 2023 GX is not a serious offroader, and doesn't have locking rear differentials.

The 2024 GX is an attempt to address that and one of the reasons why it now has locking rear diffs if you get the Overtrail option pack.

[broncocountry25]

MSRP for the model I went with was about 64K got about $750 off, so no screaming deal. This is in Colorado, I know a lot of other states might be offering better deals. I found the model that I really wanted color/interior/premium sound, its awesome. I also am not the type to sit around and play hard ball for weeks to score another $1K off. I got it all done in half a day which has value to me when I drove off with exactly what I wanted.

I am aware of the 24 model, I do love the body of that one. I am also in the camp of going for the proven design and read a lot about how turbos wear out faster (no matter who makes them even Toyota). The V8 feels amazing and I love the look of the 23.

I think the demand will remain for this version like others before. If I want to upgrade down the road I will sell it and go buy the new version.

Also as perspective there was an 84 person waiting list for the 24 at this dealer they were a year out. They said there is always a feeding frenzy the first year and then demand drops to normal levels. So for those who want it next year go get an allocation for it now.

The prices are also not released yet but I think that one will be at least 10K more for the base and the over trial could break 80K+

Have a good day everyone, I am going for a ride!

[GatorMD]

Just got a sweet deal in NJ on a 23 GX for my wife. Pinned two local dealerships against each other on the last day of the month and was able to get a couple thousand off of mrsrp. I paid cash. Was it the smartest idea on paper, nope. Could I have done better with the finance deal and kept my cash in treasuries or a high yield account, yup. But I'm extremely debt averse and it feels much better to me having two paid for cars in the garage.

[broncocountry25]

Just got a sweet deal in NJ on a 23 GX for my wife. Pinned two local dealerships against each other on the last day of the month and was able to get a couple thousand off of mrsrp. I paid cash. Was it the smartest idea on paper, nope. Could I have done better with the finance deal and kept my cash in treasuries or a high yield account, yup. But I'm extremely debt averse and it feels much better to me having two paid for cars in the garage.

Nice congrats on the new ride!

Was going to drop the Youtube video below that might help others if you are trying to decide.

https://www.youtube.com/watch?v=F-i7NxaMvLs

[GatorMD]

Haha I watched the same video plus many others before purchasing. The old model is tried and true. We'll be driving it until the wheels fall off which will not be for many, many years and miles. Congrats on the purchase.

[illumination]

Regarding the vehicle I have owned 2 GX's, they have been amazing vehicles. I personally would buy the "old" current version and get the tried and true V8. These things really are built like tanks, everything feels heavy duty. It's like a slightly smaller Land Cruiser. I have a feeling they will fetch a premium on the used market someday. To me it's a much better value than a loaded Toyota 4 Runner.

On the loan, I never really have understood the angle on captive financing like this. Usually it's some sort of trade, the purchase price gets lowered if you pay cash and don't take the "subsidized" loan. Who then "eats" this subsidized loan and what is the point? It's not like the dealer needs this to move the product, if anything there are shortages.

If I had 2 buyers, one that paid cash and one that I had to subsidize a loan for, I would want the cash buyer unless I somehow made a profit on the loan. How can you have a profitable loan if it's so far under the market rate? Is there some fine print that jumps up the interest after a certain time period? I am always weary of any transaction when I don't understand how the other party is making money.

[AS7911]

2 comments.

1) When you tell a dealer "I'm paying cash", that tells them "Raise the price $1000 because we're not getting the finance company kickback". So taking the Lexus financing is a good idea.

If the finance being offered was at 9%, then I would agree with you... but at 2.5%, I dont see how this loan is adding to the profit.

[broncocountry25]

Regarding the vehicle I have owned 2 GX's, they have been amazing vehicles. I personally would buy the "old" current version and get the tried and true V8. These things really are built like tanks, everything feels heavy duty. It's like a slightly smaller Land Cruiser. I have a feeling they will fetch a premium on the used market someday. To me it's a much better value than a loaded Toyota 4 Runner.

On the loan, I never really have understood the angle on captive financing like this. Usually it's some sort of trade, the purchase price gets lowered if you pay cash and don't take the "subsidized" loan. Who then "eats" this subsidized loan and what is the point? It's not like the dealer needs this to move the product, if anything there are shortages.

If I had 2 buyers, one that paid cash and one that I had to subsidize a loan for, I would want the cash buyer unless I somehow made a profit on the loan. How can you have a profitable loan if it's so far under the market rate? Is there some fine print that jumps up the interest after a certain time period? I am always weary of any transaction when I don't understand how the other party is making money.

I agree with you on the older model, I absolutely love it! Took a Sunday drive today and it was so smooth, excited I took the plunge.

There is no fine print as far as the interest rate moving. I think at least in my state there are laws that require them to lay out the amount you pay for the financing rate and dollar cost.

I did 48 months at 2.5% and can invest the money in a HYSA or Money Market.

I also have the ability to accelerate depreciation for the vehicle through my business. This year the special deprecation allowance is capped at 80% and maxed out at $28,900 for SUVs. So there is a good chunk coming back to me for buying this year.

Happy with my choice and good to hear you loved your vehicles!

[lazydavid]

For off-roading, I'd actually prefer a twin turbo V6 to keep it from getting nose-heavy.

I don't know that 75 lbs (the weight difference between the 1UR-FE V8 and V35A-FTS TTV6) is really THAT meaningful in a 5,200 lb vehicle.

[illumination]

2 comments.

1) When you tell a dealer "I'm paying cash", that tells them "Raise the price $1000 because we're not getting the finance company kickback". So taking the Lexus financing is a good idea.

If the finance being offered was at 9%, then I would agree with you... but at 2.5%, I dont see how this loan is adding to the profit.

I'm genuinely curious ,what is the angle here and who is making money? The dealership doesn't seem to need this financing to move cars, so I don't see them subsidizing the loan. A finance company could get a better rate of return on a treasury bill. So why would a financial institution rather make 2.5% on something as risky as a car loan and not make around 5% "risk free" instead?

I can completely understand why traditionally, a car dealership makes more money on the financing than the profit margin from the actual sale and wants the consumer to finance. But a "too good to be true" interest rate below what should be the market rate means there is something on the backend. A car loan "should" be something like 9%-10% if the average mortgage rate is now around 8%.

I feel like when I don't understand something, I get burned.

[lazydavid]

I'm genuinely curious ,what is the angle here and who is making money? The dealership doesn't seem to need this financing to move cars, so I don't see them subsidizing the loan. A finance company could get a better rate of return on a treasury bill. So why would a financial institution rather make 2.5% on something as risky as a car loan and not make around 5% "risk free" instead?

I wouldn't be so sure about the bolded statement. The GX in question is a 14-year-old model, which was already a fairly slow seller (averaging 2,400 units/month) even before its replacement was announced and production began this month. With current market rates, compelling financing offers are probably a more effective sales tactic than putting a couple of grand on the hood.

[Onlineid3089]

When I bought my Honda in February we could have paid cash. Never even considered it as Honda was offering 1.9% for 48 months. I only put as much down as they'd let me put on a credit card - $2,500. The rest is sitting in VUSXX earning something like 5.3% right meow.

[illumination]

I'm genuinely curious ,what is the angle here and who is making money? The dealership doesn't seem to need this financing to move cars, so I don't see them subsidizing the loan. A finance company could get a better rate of return on a treasury bill. So why would a financial institution rather make 2.5% on something as risky as a car loan and not make around 5% "risk free" instead?

I wouldn't be so sure about the bolded statement. The GX in question is a 14-year-old model, which was already a fairly slow seller (averaging 2,400 units/month) even before its replacement was announced and production began this month. With current market rates, compelling financing offers are probably a more effective sales tactic than putting a couple of grand on the hood.

I guess we'll just to have to agree to disagree, I just had a family member go try and buy a Lexus SUV and the dealership had been essentially cleaned out. She ended up taking home a model she didn't really want but she needed car ASAP.

But just for the sake of argument, pretend the dealership truly is experiencing shortages and if anything, lack of inventory is the problem. That there are waiting lists. What would be the incentive to offer a 2.5% loan and who would benefit?

I'm honestly trying to figure this out. Someone is taking a haircut and I'm just curious why.

I would take a 2.5% loan on a car all day.

[pizzy]

Regarding the vehicle I have owned 2 GX's, they have been amazing vehicles. I personally would buy the "old" current version and get the tried and true V8. These things really are built like tanks, everything feels heavy duty. It's like a slightly smaller Land Cruiser. I have a feeling they will fetch a premium on the used market someday. To me it's a much better value than a loaded Toyota 4 Runner.

On the loan, I never really have understood the angle on captive financing like this. Usually it's some sort of trade, the purchase price gets lowered if you pay cash and don't take the "subsidized" loan. Who then "eats" this subsidized loan and what is the point? It's not like the dealer needs this to move the product, if anything there are shortages.

If I had 2 buyers, one that paid cash and one that I had to subsidize a loan for, I would want the cash buyer unless I somehow made a profit on the loan. How can you have a profitable loan if it's so far under the market rate? Is there some fine print that jumps up the interest after a certain time period? I am always weary of any transaction when I don't understand how the other party is making money.

I agree with you on the older model, I absolutely love it! Took a Sunday drive today and it was so smooth, excited I took the plunge.

There is no fine print as far as the interest rate moving. I think at least in my state there are laws that require them to lay out the amount you pay for the financing rate and dollar cost.

I did 48 months at 2.5% and can invest the money in a HYSA or Money Market.

I also have the ability to accelerate depreciation for the vehicle through my business. This year the special deprecation allowance is capped at 80% and maxed out at $28,900 for SUVs. So there is a good chunk coming back to me for buying this year.

Happy with my choice and good to hear you loved your vehicles!

IS the $28,900 multiplied by the % the car is used for business? OR since the car cost more than that you would still get the full $28,900?

[cubs1999]

But just for the sake of argument, pretend the dealership truly is experiencing shortages and if anything, lack of inventory is the problem. That there are waiting lists. What would be the incentive to offer a 2.5% loan and who would benefit?

I'm honestly trying to figure this out. Someone is taking a haircut and I'm just curious why.

I would take a 2.5% loan on a car all day.

This is just what I've gathered from listening to some podcasts and my car purchases years ago.

As already mentioned, this helps inventory that isn't moving. The dealers like getting the car off the lot bc it helps them meet sales incentives that can be big money for them and they don't have to pay the 5-7% interest for that vehicle on the floor plan loan (dealers take loans for that inventory sitting on the lots, to the time of like 5-7% according to Caredge YouTube talks I've listened to).

The dealer likes the loans bc they can more stealthily add high profit items onto the car. Wouldn't you like to not worry about any issues down the line for x years? For only $15 more a month (or whatever), we can set you up with our extended warranty. Same with etching, flashing brake light, low jack, service plan etc. All that stuff some dealers add on to the sticker before, some can tack on later like this.

I would assume loan can get people to spend more for a car than they were initially planning to if they were paying cash or a higher interest rate as well.

[lazydavid]

I guess we'll just to have to agree to disagree, I just had a family member go try and buy a Lexus SUV and the dealership had been essentially cleaned out. She ended up taking home a model she didn't really want but she needed car ASAP.

Agreed. Though now I am curious where this is, what she wanted (Likely not a GX) and what she wound up with. The five closest Lexus dealers to me have a combined total of 100 new GXs on the ground--12 on the low end, 29 on the high.

But just for the sake of argument, pretend the dealership truly is experiencing shortages and if anything, lack of inventory is the problem. That there are waiting lists. What would be the incentive to offer a 2.5% loan and who would benefit?

I'm honestly trying to figure this out. Someone is taking a haircut and I'm just curious why.

I would take a 2.5% loan on a car all day.

With your bolded premise, we are in 100% agreement. There would be no incentive for them to offer it, and I would 100% take it if I was buying that model anyway. Hell, I paid cash back in June for a car I would have loved to finance at 2.5%. But the rate was 5.99%, so big, painful check it is.

Looks like 2.49% is available on the ES, GX, IS, NX, RX, and RZ. But not on the UX, TX, RC, LX, LS, or LC.

[DS03]

Looking at a 23 Lexus GX this weekend.

They are offering 2.5% financing for up to 48 months. We have the cash to pay it but I think I will do something like 20K down and then pay the remainder @ 2.5% off over 4 years.

Anyone else recently take advantage of this sort of financing on Lexus or another vehicle?

Not addressing the financing question, that seems to have been answered.

Did you know they are redesigning the GX for 2024 completely, body styling is different and so are some of the interiors. It's a much nicer look, and given the GX has long cycles between upgrades, this is something that will last for a long time. But the 2023 model is long on the tooth and will look outdated right away.

new GX

Came here to say this.

Boxy SUVs are in.

Egg-shaped SUVs are out.

Current GX will look dated soon.

Plus the dreaded barn door is out in the rear, with a new lift gate open, and the engine gets an update too, the V8 is out instead V6 with twin turbo. I'd definitely buy the 2024 if I were going to buy a GX in a flash and ignore any deals on the old model. These SUVs are keepers and best to ignore short term deals.

The V8 is the reason to buy it now! And, I've never heard anyone describe the current GX as egg shaped... it's anything but.

[broncocountry25]

Regarding the vehicle I have owned 2 GX's, they have been amazing vehicles. I personally would buy the "old" current version and get the tried and true V8. These things really are built like tanks, everything feels heavy duty. It's like a slightly smaller Land Cruiser. I have a feeling they will fetch a premium on the used market someday. To me it's a much better value than a loaded Toyota 4 Runner.

On the loan, I never really have understood the angle on captive financing like this. Usually it's some sort of trade, the purchase price gets lowered if you pay cash and don't take the "subsidized" loan. Who then "eats" this subsidized loan and what is the point? It's not like the dealer needs this to move the product, if anything there are shortages.

If I had 2 buyers, one that paid cash and one that I had to subsidize a loan for, I would want the cash buyer unless I somehow made a profit on the loan. How can you have a profitable loan if it's so far under the market rate? Is there some fine print that jumps up the interest after a certain time period? I am always weary of any transaction when I don't understand how the other party is making money.

I agree with you on the older model, I absolutely love it! Took a Sunday drive today and it was so smooth, excited I took the plunge.

There is no fine print as far as the interest rate moving. I think at least in my state there are laws that require them to lay out the amount you pay for the financing rate and dollar cost.

I did 48 months at 2.5% and can invest the money in a HYSA or Money Market.

I also have the ability to accelerate depreciation for the vehicle through my business. This year the special deprecation allowance is capped at 80% and maxed out at $28,900 for SUVs. So there is a good chunk coming back to me for buying this year.

Happy with my choice and good to hear you loved your vehicles!

IS the $28,900 multiplied by the % the car is used for business? OR since the car cost more than that you would still get the full $28,900?

The $28,900 is just the cap this year for a SUV. So if you bought a $60,000 SUV (like GX) you can accelerate depreciation on 80% ($60,000x.8) $48,000 of depreciation in current year but capped at $28,900. In my case I use this about 50% of the time for the business or $24,000. So under the max as a write off this year. (Federal bracket 24% for me + 4.4% CO income tax, saves me roughly $6,800 on this years tax bill with this example. Will be a little higher for the actual purchase price.

[FrugalConservative]

Be sure and check the comfort on bumpy roads. The current models are notorious for poor ride, uncomfortable seats (and terrible mpg). It is a somewhat dated platform. Have you checked alternatives?

You have no idea what you are talking about. The older style GX with the KDSS suspension is well known for being smooth.