A Younger Buyer -- The all-new Lexux UX crossover was designed to attract the next generation of customers to the luxury brand. So it was the perfect vehicle to serve as the test case for the Lexus Complete Lease.
Envision Toyota’s future as a mobility company and images of Jetson-like flying cars, sophisticated AI droids and even a hydrogen fuel cell-powered moon rover might dance in your head.
But what about that of a lowly lease contract? Probably not.
Unless, that is, you’re one of the team members who helped craft the Lexus Complete Lease launched in pilot form at the Chicago Auto Show in February.
“Our standard lease today looks the same as it did 20 years ago,” says Matthew Schultz, the LFS Finance Products programs analyst charged with sorting out the details. “The Lexus Complete Lease really does challenge everyone’s assumptions about the limitations of what a lease can be.”
“And it lays the groundwork for the future of our business,” says Rob Santossio, manager of Finance Products for LFS.
How Does It Work?
From the outside looking in, this new offering seems straightforward. It’s currently available only to drivers of the all-new Lexus UX crossover, and only at 79 Lexus dealers in seven states: California, Florida, Illinois, Indiana, Massachusetts, Rhode Island and New Hampshire.
Qualifying guests can make a single recurring monthly payment and get all of the following:
- Use of a new UX for up to 10,000 miles per year for two years
- All scheduled maintenance every 5,000 miles (up to 20,000 miles)
- Vehicle insurance with a $500 deductible (provided by Travelers)
- Guaranteed Auto Protection (GAP) waiver
- Connected vehicle services, such as SiriusXM satellite radio, Enform Remote, and Destination Assist (included on navigation-equipped models) for two years
- Tire and wheel protection
- $1,000 excess wear and use allowance
For guests, this new lease aims to simplify their lives. For Lexus, it has the potential to deepen the relationship, increasing the likelihood that the guest will remain loyal to the brand when the time comes for a new lease on a new model.
Sales Pitch -- Here's a page out of the Lexus Complete Lease brochure dealers are sharing with customers interested in learning more about this innovative approach.
“We also wanted to appeal to younger guests who are new to Lexus and the luxury segment,” says Todd Blickenstaff, senior analyst in Lexus product marketing. “That’s one of the missions of the UX, so it was the perfect vehicle to put an all-in-one lease to the test.”
This landing site on Lexus.com
shows how the brand is making that pitch. Time will tell if it hits its mark — with guests and dealers — or if it needs to be tweaked before it’s made available nationwide and across the full Lexus product line.
‘An Inflection Point’
But those details, no matter how they play out, won’t change the bigger picture.
“We’re at an inflection point where we need to continue to grow our existing business while we also transform it,” says Santossio. “This new product is a toe in the water. The knowledge and experience we gain will be invaluable.”
That includes, for the first time, partnering with an insurance provider (in this case, Travelers Companies in collaboration with Toyota Insurance Management Solutions). And it includes packaging services like tire and wheel protection that, traditionally, have been stand-alone products offered by the dealer.
In the long run, it’s this shift in mindset that could prove to be the big payoff of the Lexus Complete Lease. The mobility company we keep talking about certainly won’t materialize without it.
“Everyone recognizes that we have to try new things to meet the evolving needs of our customers,” says Santossio. “This is a step in that direction.”
By Dan Miller