This method of finance provides you with the means to buy the Lexus vehicle of your choice, and to pay us back with regular instalments over an agreed period. Ownership will pass to you as soon as you've paid all the instalments. We will help you choose the finance period that suits you – they can vary from 12 to 60 months. You must decide whether or not this should include a once-off final balloon payment. Market-related interest rates will apply. You can choose whether to link rates to the official prime lending rate, or we can negotiate a fixed interest rate which won't change over the life of the loan. Normally, you won't need to provide a deposit – unless there is a change in the law, or to your credit profile.
This method of finance gives you the right to use your Lexus vehicle for an agreed period, during which time you make monthly rental payments. At the end of the period, ownership passes to you – either automatically, or when you meet specific conditions. The period of the finance which best suits you can be agreed, which is usually between 12 to 60 months, with or without a once-off final balloon payment. Market-related interest rates will apply. The rate can be linked to the official prime lending rate, or you can request a fixed rate for the whole period of the loan. You won't need to provide a minimum deposit unless the law changes or there is a change to your credit profile.
The total instalment refers to the sum of all your monthly instalments, including interest and capital repayment, that will be paid over the lifetime of the agreement – assuming that it runs for the full term.
A balloon payment is an inflated final instalment. It is typically much larger than your ordinary monthly payments, and it is usually made right at the end of your agreement. If you agree to this structure, your routine monthly instalments will be smaller. The balloon amount is worked out at the beginning of your contract, and is an estimate of what the value of the vehicle will be at the time you make your last regular instalment. You will be liable to settle the balloon amount in full.
A residual value is similar to a balloon payment, but is available only on rental agreements that fall outside the ambit of the National Credit Act (NCA), or that were set up before the NCA came into effect. Residual values are subject to VAT. The risk on a residual value will not rest with you, as the liability rests with the financial institution.
The balloon amount is shown in the instalment agreement or lease agreement within the section named Financial Payment Structure. If you sign a payment schedule with your agreement, the balloon amount will appear on that schedule – as the very last payment.
The residual value is shown in the rental agreement as the anticipated market value of the vehicle on the date that the agreement expires. Since all amounts recorded on the rental agreement exclude VAT (VAT is due on each monthly rental), the residual value will be given exclusive of VAT.
Depreciation is the effect that wear and tear, usage, mileage and economic conditions have on the value of your car. As it ages, its value is likely to fall.
You may be worried that you'll suddenly be faced with a mechanical breakdown, and you won't be able to afford your vehicle's repair costs. What type of insurance will cover you for this?
A warranty – specifically, Lexus Distance Plan & Warranty – will cover repair costs in the case of mechanical breakdown. We offer various warranty options – these are not all identical, and may not all cover routine wear and tear, so you should carefully check on the Terms and Conditions which apply. Lexus Service and Maintenance Plans also available on request.
A deposit is an amount paid by the borrower at the time of purchase, to reduce the total finance or loan amount required. If you pay a deposit, your monthly instalments will also reduce. A deposit is not always required when financing a motor vehicle.
Under the National Credit Act, a monthly administration fee is a monthly fee that is charged for the administration of an account.
Under the National Credit Act, an initiation fee is a compulsory once-off fee that is charged when entering into a new finance agreement. The initiation fee can be financed as part of the overall agreement, which is what normally happens, or it can be paid separately.
When financing a vehicle, you will have the option of choosing a variable interest rate, or a fixed interest rate. A variable, or linked, interest rate is tied to the prime lending rate, and therefore the amount of the monthly instalment may change during the loan term, if interest rates are adjusted up or down. A fixed interest rate is usually higher than a linked interest rate, but can provide you the comfort and peace of mind that the instalment will remain the same for the agreed period, and will not change.
Our warranty options provide cover on items such as the engine, gearbox, differential, steering and braking systems. There may be limits to the cover, depending on the age of the vehicle and the mileage done. There can be additional benefits of free roadside and medical assistance, cover for certain towing costs, and hotel accommodation should your vehicle break down more than 100 km from your home. Service and Maintenance Plans are also available on request.
We can change your monthly instalment date at your request – unless it is your very first instalment – and if we have at least 5 calendar days before your next instalment is due, so we can process the change. You should be aware that sometimes the change to a later due date might result in two instalments being paid in the same month. The new date will be applied to all remaining instalments and may affect the date of the final instalment. There can be cases when we aren't able to change the date for you – for instance if this has already been done recently.
The National Credit Act allows Financial Institutions to charge a monthly service fee of R57 as well as a once-off initiation fee of R1 140. Both of these amounts are indicated in your signed agreement. Agreements which fall outside the ambit of the National Credit Act don't have a monthly service fee, but they do feature an initial processing fee.
Yes. In terms of your signed agreement, your insurance cover must be complete, or comprehensive. It must be equal to the sum of your outstanding financial obligation to the Financial Institution.
Our Credit Protection Policy – sometimes also referred to as Credit Life – covers you and your family in the event of your death, permanent disability, temporary disability, retrenchment or the diagnosis of a dread disease. The following are defined as dread diseases: heart attack, stroke, coronary artery surgery, cancer, kidney failure, organ transplant, paraplegia, coma and serious burns.
In the event of your:
- Death – the policy will pay out what you still owe your financial provider.
- Permanent Disability – the policy will pay out what you still owe your financial provider.
- Temporary Disability – while you are temporarily disabled, you will receive a monthly amount which covers your monthly instalments.
- Dread Disease Diagnosis – once there is a conclusive diagnosis of the dread disease, the policy will pay out the amount you still owe your financial institution.
- Retrenchment – your monthly instalment will be paid for a maximum period of 3 months per claim. You may only claim for a total of 6 months.
The Outstanding Debt Policy is basic cover that Lexus Financial Services arranges and debits to your account if you don't have comprehensive insurance on your vehicle. Any asset you acquire under a credit agreement has to be insured, so that you and Lexus Financial Services are protected in the event of damage or total loss. Occasionally, though, people decide to cancel their vehicle's comprehensive insurance after signing an agreement, because they feel they can't afford the insurance. This is when Lexus Financial Services activates the Outstanding Debt Policy. If the vehicle is stolen or written off, this policy protects us - and helps you - by covering the outstanding balance owing on the vehicle. You should be aware that the Terms and Conditions of your credit agreement specify that Lexus Financial Services is entitled to protect its asset in this way.
Our Courtesy Car policy is a vehicle replacement insurance product. If you sign up for this, you will be provided with a courtesy car if your vehicle is being serviced or is in for mechanical repairs, or if it was written-off, stolen or involved in an accident.
The Courtesy Car policy will provide you with the uninterrupted use of a rental vehicle, with unlimited kilometre usage, for 2 days while your car is being serviced. This is extended to 7 days in the event of a mechanical breakdown or to 21 days if your car is in an accident, written-off, hijacked or stolen.
If your vehicle is written-off or stolen, you may find that the money your insurer pays out is not enough to cover what you still owe your finance house. The GAPP (Guaranteed Auto Protection Plan) policy pays the shortfall for you.
It will be a weight off your mind to know you won't be short of any money you owe to us if your vehicle is written-off or stolen. Not only does this product protect your wallet; if, unintentionally, you don't comply with the underlying insurance policy conditions and the insurer repudiates your claim, GAPP will kick in.
Our Deposit Protector Policy protects the value of the deposit you paid, in the event of total loss.
An insurance pay-out is often not enough to cover the deposit that you originally put down when you activated your credit agreement. If your vehicle is written off or stolen, this policy covers the original deposit that was paid.
If your vehicle is written-off or stolen, the policy will ensure that Lexus Financial Services is paid the outstanding debt. This means you don't have to continue to pay instalments on a vehicle you no longer use. The Outstanding Debt Policy will only pay out if you didn't have a comprehensive insurance policy in place. Occasionally, people decide to cancel their vehicle's comprehensive insurance policy after signing a credit agreement because they feel they can't afford the insurance. If your vehicle is not comprehensively insured, you are in breach of contract with us. This is why you would need the limited cover which is offered by the Outstanding Debt Policy.
Please bear in mind that the Outstanding Debt Policy is not a Comprehensive Insurance Policy.
Our Retrenchment Policy has been designed with the current economic climate in mind. It will minimize the loss to you and your financial institution if you are involuntarily retrenched – on up to two occasions during the life of your finance agreement.
If you are retrenched, the policy will pay your instalments. This also covers insurance premiums, but not arrear interest and arrears.
The Return to Invoice policy protects your asset from the effects of depreciation. If your vehicle is stolen or written-off, the policy kicks in and covers the difference between the original purchase price and the market value of your vehicle.
You gain peace of mind by knowing that if your vehicle is written-off or stolen during the period of insurance, the policy will cover the difference between the original purchase price (this is the price shown on the purchase agreement/invoice) and the market value of the vehicle. However, it excludes any refundable amounts, which may include Credit Life or motor warranty premiums. New vehicles tend to depreciate the most in their first year. In their second and third year, depreciation is much less. The Return to Invoice policy protects you from significant financial loss in the event of theft, or if the vehicle is written off.
A tracking device is an electronic tag fitted in the vehicle. It enables the owner or a third party to track the vehicle's location if the vehicle is stolen or hijacked.
Unfortunately this isn't possible. As the account-holder, you are required to keep paying the monthly instalments. However, you can speak to Collections Solutions who, on our behalf, can help you set up a payment plan whereby you can be given a few months – usually no more than 3 months – to catch up with payments. You should note that arrear interest and Debt Collector's Act (DCA) commission will be raised on any overdue amount. The fact that you are in arrears will also be reflected on your Lexus Financial Services account payment profile and on the records of all credit bureaus, and this could negatively affect you.
There are several options open to you and we are always willing to negotiate ways to accommodate your needs. For expert advice speak to a Lexus Financial Services representative at your closest Lexus dealer.
When you apply for finance, your chance of getting approval may be affected if Lexus Financial Service's system has a record of a bad debt account in your name. The details may show in the system even if your bad debt account has been settled in full and your credit bureau record has been amended accordingly. And if the bureau removed the record two years after the debt was cleared, the record of the bad debt account will still remain in Lexus Financial Service's system. You may run into a snag if you apply for finance and there is a record of your bad debt account in our system. If you think this is likely to happen, please speak to a Lexus Financial Services representative at your closest Lexus dealer. We will consider all the factors in your case and will take into account the reason for your bad debt account, how long it was in existence and how and when the balance was settled. Our aim will be to still help you, if this is in the interests of both sides.
We may only de-register the vehicle once the insurance company has sent us a written instruction to do so. The insurance company is first required to assess the vehicle to determine the extent of the damage.
Arrear interest is charged if you have an overdue amount payable on your account. It takes the form of a monthly amount, that Section 101 of the National Credit Act entitles us to charge you. Arrear interest is charged until the overdue amount has been settled.