Who needs a car loan in Singapore? Not Lexus drivers. The Lex’plore scheme lets you pay a monthly amount and drive a new Lexus home

SINGAPORE — Lexus has become the latest car brand to offer a lease-to-own scheme here. The premium Japanese carmaker’s “Lex’plore Programme” offers drivers the chance to drive a new Lexus with no downpayment over a five or seven year period.

At the end of the lease, the customer either takes ownership of the car or receives a cashback sum.

The cheapest car available on the scheme is the Lexus UX 200 Executive, a sport utility vehicle (SUV) that costs S$162,800 (including certificate of entitlement) to buy.

Under Lex’plore, the same car costs S$2,191 a month for a seven-year contract. Lexus distributor Borneo Motors says customers can drive the car home after they pay for insurance and the first month’s installment. After the seven years are up the customer will have paid S$184,044, but can either keep the car or take back S$38,773.

A five-year contract for the same costs UX 200 Executive costs S$2,929 a month, for a total outlay of S$175,740 and a cashback sum of S$50,893.

The scheme is similar to Flow by BMW, which also offers cash rebates at the end of each contract, but requires customers to place a deposit of S$16,000 upfront.

Borneo is offering Lex’plore with other models. It’s available for the NX, another SUV, as well as the IS and ES, the brand’s compact and mid-size sedans. The IS 300 Executive costs S$2,478 a month for seven years.

One advantage of the scheme, says Borneo, is that it allows customers to circumvent the need for a large down payment that traditional hire purchase financing requires. To finance a UX 200 Executive, for example, a buyer would need to pay 40 per cent of the car’s price upfront, or S$65,120.

Essentially, the scheme suits buyers who are cash-poor but have the income to support the monthly payments.

“Lex’plore is an initiative aimed at drivers who wish to enjoy the freedom of owning a car without having to make a significant down payment as with typical vehicle purchases,” Samuel Yong, Director of Marketing and Business Strategy, Borneo Motors Singapore, said in a statement.

Borneo also points out that signing up for a new Lexus this way also doesn’t impact a customer’s Total Debt Servicing Ratio, or TDSR. That’s important for anyone shopping for a property; having to service a traditional car loan potentially takes a few hundred thousand off the amount a home buyer can borrow.

In any case, high prices in Singapore mean that driving a car almost requires a person to beg, borrow or steal, but schemes like Lex’plore provide a fourth choice.

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