Lucid Group Announces Bank of America as its Preferred Lender to Support the Ownership Experience
【Summary】Lucid Group announced on Monday a preferred lending partnership with Bank of America. Customers can now apply for financing directly through Bank of America online or use Lucid’s dedicated concierge service when ordering a Lucid Air. The Lucid Air sedan priced well over the budget of most car buyers, so the lending partnership with Bank of America may help the company to sell more vehicles.
Customers shopping for the ultra-luxurious-electric Lucid Air sedan from Lucid Group are getting some help with financing from lender Bank of America. Lucid announced on Monday that customers can now apply for financing directly through Bank of America online or use Lucid's dedicated concierge service when ordering a Lucid Air.
Lucid recently started the first deliveries of the Air sedan and said it has more than 17,000 reservations so far. However, the Lucid Air priced well over the budget of most car buyers, so the preferred lending partnership with Bank of America may help Lucid to sell more vehicles.
Depending on the configuration, the various Lucid Air models are priced from $77,400 to $169,000 for the limited edition Air Dream Edition, which despite its high price tag, is already sold out.
Bank of America is one of the biggest auto lenders in the U.S. The offers 60-month new car loans in California with an APR as low as 2.09%. However the actual loan terms will depend on an individual's credit history and income.
"The strategic relationship between Lucid and Bank of America is another way of enhancing and streamlining the vehicle buying experience for Lucid customers," said Amira Aly, Director of Financial Services at Lucid Group. "Lucid will continue to build out its consumer finance journey with compelling offerings in order to get more vehicles into the hands of customers as we deliver the most advanced EV in the world."
Car are generally the second most expensive purchase after real estate. Therefore, a majority of new vehicles purchased in the U.S. are financed through banks, according to data from Statista. Although some wealthy consumers are able to purchase luxury vehicles like the Lucid Air and Tesla Model S outright, access to favorable financing puts more vehicles within reach of average car buyers.
From the first quarter of 2017 to the second quarter of 2020, Statistica found that 85.5% percent of new vehicles purchased in the U.S. were financed. The outstanding car loan balances in the U.S. amounted to $1.17 trillion in the first quarter of 2020, according to Statistica.
For auto lenders like Bank of America, the loans provide sources of interest revenue, with the vehicles being used as collateral.
"Supporting the growing demand for electric vehicles through an innovative financing solution is a critical step toward a low-carbon future," said Fabien Thierry, Head of Vehicle Lending Products at Bank of America. "This financing solution was developed for Lucid to make it easier for customers to finance electric vehicles. This effort reinforces our $1 trillion commitment to environmental transition and other low-carbon solutions."
Customer deliveries of Lucid Air, which is being produced at Lucid's new factory in Casa Grande, Arizona, began on Oct 30.
The lowest priced Lucid Air model is the "Air Pure", with a starting price of $77,400. Deliveries of the Air Pure are expected to begin in the second half of 2022.
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