Cato: Vaughan, look at the table below from the Power Information Network. The Lexus ES 350 has a phenomenal loyalty rate and that, in part, explains why a two-year-old ES holds 76 per cent of its original value.
Vaughan: Which value would that be? The old $42,900 manufacturer's price or the new one at $39,900?
Cato: Good point. Lexus, like its parent Toyota, has lowered prices essentially across the board in Canada. This will lower resale values, of course. How much we've yet to see.
But the point I want to make here is that about half of the people who buy a new ES trade in a used one, or a Toyota Camry, which uses the same basic mechanical bits and pieces as the Lexus. And that does not include lease returns. I am sure the lease return figures further bolster the loyalty numbers.
Vaughan: The so-called "turn rate" is impressive, too. That refers to the length of time a vehicle stays on a dealer lot — the amount of time it takes to turn inventory, in the form of a new car, into a sale.
Cato: Right. Twenty-three days. An ES typically stays with a dealer for just 23 days. The average in Canada is 64 days and conventional midsize sedans hang around longer — 70 days on average.
Vaughan: Of course, Cato, the people who buy this car tend to be tremendously conservative.
Cato: Your type, exactly. Age 55 and up, by far mostly male, almost 60 per cent paying cash. You're at home here.
Vaughan: Very intelligent people, every one of them. They are buying a car with extraordinary reliability — a top recommended pick by Consumer Reports and a leader in various other quality surveys, from J.D. Power and Associates to you name it.
Cato: We've talked about the Lexus price cuts but what's interesting here is that Lexus is offering few other "sweeteners," factory giveaways and the like. The best financing rate Lexus offers is 5.9 per cent for four years. And no cash handouts that I can find.
Vaughan: Dealer margins on these cars are slim, too — say about eight per cent.
Cato: Which limits the scope of the deal. Here's one place I would push for a better deal: that $1,780 freight charge. Outrageous. This is a perfect example of freight charges in Canada which typically run to twice or even three times as much as in the U.S.
Vaughan: We're a big country with a small population, but it does not cost three times as much to ship a car in Canada. For once you make a good point, Cato.
Cato: Okay, a few quick words about the ES itself. This car is not about 0-100 km/hour acceleration and fast slalom times. Not at all.
This is a car for buyers who want something comfortable and quiet, a car that won't break down, and one that looks respectable in the driveway.
Vaughan: That describes quite a few people with money. Nonetheless, I personally think Lexus has gone too far with isolating drivers from the experience of driving.
Cato: No question. When I drive this car I feel as though I am being smothered with a pillow.
Vaughan: Beautiful interior, though. The dark, soft-touch dashboard is outstanding. The leather seats, the walnut accents on the console and doors...
Cato: All very high society. The ES 350 is a silent, elegant and bulletproof car, and that's how it distances itself from the BMW 335i, the Cadillac CTS, the Infiniti G35, to name three.
Vaughan: There is something to be said about a car that will never make you unhappy.
Cato: I'd expect you to settle for a life with few thrills. In any case, the loyalty rate here says that a lot of people drive upscale cars, but don't necessarily like to drive.
Vaughan: Not everyone is like you, Cato, aging boy racer.
2008 Lexus ES 350
Buyer's Age Range:
- 16-34 years: 2.9%
- 35-54 years: 25.2%
- 55+ years: 71.9%
Gender ratio:
- Female: 32.2%
- Male: 67.8%
Type of sale:
- Cash/non-dealer financing: 57.5%
- Finance: 14.4%
- Lease: 28.2%
Most popular colours
- Red
- Black
- Blue
Vehicle price: $43,907 (does not include taxes, license or title fees)
Days to turn: 23
Trade ins: 48.6% (does not include lease returns)
Top three trade ins:
- Lexus ES 330
- Lexus ES 300
- Toyota Camry
Average monthly payments: (includes PST & GST)
- Lease (48 month term): $709
- Finance (48 month term): $652
Source: Power Information Network
