The LP 250 differed in having the size of its two cylinder two stroke engine reduced to 250 cc.
The Lloyd LP 250 became known in Germany as the “Driving Test Nerves Car” („Prüfungsangst-Auto“) because, under the licence classifications then in force, vehicles having an engine capacity below 250 cc fell into a more accessible drivers’ licence category (Licence Category 4) than larger engined cars.
In later years, elderly motorists who had never acquired a more conventional drivers’ licence were happy to spell out that "vehicles" in this case included cars as evidence that they were indeed licensed to drive cars and did not need to take the additional test normally necessary for driving passenger cars (Licence Category 3).
On its introduction in summer 1956, the car lacked some of the relatively luxurious features included on the LP 400 sister model.
The car was offered for sale at just DM 2,980, though the missing features were available at extra cost as options.