LOS ANGELES -- Based on early sales, the captive finance arm of Toyota's Scion youth brand is capturing a higher percentage of buyers, and younger buyers, than the financing arm for Toyota and Lexus brands.
Scion Solutions, a subsidiary of Toyota Financial Services, has financed 51 percent of Scion customers buying or leasing Scions, the rest either paying cash or using third-party finance companies. By comparison, about 40 percent of Toyota and Lexus customers finance through Toyota Financial Services.
Scion Solutions says the average age of its customers is 35. But the 27 percent of Scion Solutions customers who used the option of applying online for credit had an average age of 27.
In contrast, the typical Toyota customer who uses the captive finance arm is 42 years old, while Lexus captive finance customers are an average of 44 years old.
Scion went on sale June 9 in California. The brand sold 2,970 units through July. The brand rolls out through the South and the Eastern seaboard this year and will be nationwide by June 2004.
Although automakers such as Mitsubishi have gotten into trouble financing young buyers, Scion reports that 60 percent of its customers qualified for the best two credit rates available. Scion financing rates range from 4.5 percent for a consumer with a good credit history to 6.25 percent for buyer with a fair history and 9.0 percent for someone with no credit history.
"With Scion, we are anticipating a younger buyer who may not have an established credit history," said Dave Nordstrom, Toyota Financial Services corporate manager of products, in a release.
"With Scion Solutions, we are creating an affordable way for these individuals to make a major purchase and start building credit."
As an incentive, anyone who finances through Scion Solutions will get a $50 gift card good on Scion accessories and parts.