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Should You Make a Down Payment When You Lease? | Edmunds

Edmunds.comEdmunds.com Member, Administrator, Moderator Posts: 10,315
edited March 2019 in General

imageShould You Make a Down Payment When You Lease? | Edmunds

Should you make a down payment on your new lease? If you're getting a low money factor, maybe not.

Read the full story here


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    Keisha789Keisha789 Member Posts: 1
    I think i just got ripped off. We put down 2495 on a lease vehicle msrp 22845.00 and they add on some tire lock nonsense for $695. With a payment of 250 a month was told because his credit was 680 we had to put down money. We never signed the leased paper yet. They just have out money S2495
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    MichaellMichaell Moderator Posts: 244,993
    Keisha789 said:

    I think i just got ripped off. We put down 2495 on a lease vehicle msrp 22845.00 and they add on some tire lock nonsense for $695. With a payment of 250 a month was told because his credit was 680 we had to put down money. We never signed the leased paper yet. They just have out money S2495

    So if you haven't signed the contract and have not taken delivery of the car, you can go into the dealer and unwind the entire deal. Then you can start over and structure the lease anywhere you'd like.

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    Denise1234Denise1234 Member Posts: 6
    Hi Matt,

    I'm looking to get into a new lease now. I have great credit and want to be armed with a lot of info before I make a final decision. Does it really matter what month of a year you lease a car? Will incentives get better towards the end of the year? My lease is up in July and was thinking if I could possibly ask for a lease extension so we could get closer to the end of the year if this is true.

    Also, do people just outright ask for the money factor of a car? How do I find out what the residual factor of a car is? Do I just go to Kelly blue book?

    Thanks!
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    kyfdxkyfdx Moderator Posts: 243,132

    Hi Matt,



    I'm looking to get into a new lease now. I have great credit and want to be armed with a lot of info before I make a final decision. Does it really matter what month of a year you lease a car? Will incentives get better towards the end of the year? My lease is up in July and was thinking if I could possibly ask for a lease extension so we could get closer to the end of the year if this is true.



    Also, do people just outright ask for the money factor of a car? How do I find out what the residual factor of a car is? Do I just go to Kelly blue book?



    Thanks!

    Money factors and residuals?

    Go here: https://forums.edmunds.com/

    Search by make/model for the car you are interested in. There is a lease questions discussion for every make and model.

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    HinzketchupHinzketchup Member Posts: 1
    Does the deposit fallow me into the next lease if I stay with the lease holder? I plan to lease until I die. I like Subaru so I also plan to stay in one for as long. I put a good sized deposit down. I was told by a friend that the deposit will fallow me from lease to lease as long as I stay in a subaru.
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    MichaellMichaell Moderator Posts: 244,993

    Does the deposit fallow me into the next lease if I stay with the lease holder? I plan to lease until I die. I like Subaru so I also plan to stay in one for as long. I put a good sized deposit down. I was told by a friend that the deposit will fallow me from lease to lease as long as I stay in a subaru.

    When you say "deposit", how is this reflected in the lease contract? If this is a cap cost reduction, then it is valid only for the lease in question and won't be rolled over to any subsequent lease.

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    ray_rezray_rez Member Posts: 42
    In Texas we paying tax on whole car sale price when leasing a car. Some dealers offer tax credit if you pay more money upfront. How this works?
    I got a very interesting deal recently, but dealer asking for one- pay upfront to apply tax credit and 0.00001 MF.
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    kyfdxkyfdx Moderator Posts: 243,132
    ray_rez said:

    In Texas we paying tax on whole car sale price when leasing a car. Some dealers offer tax credit if you pay more money upfront. How this works?
    I got a very interesting deal recently, but dealer asking for one- pay upfront to apply tax credit and 0.00001 MF.

    Leasing banks in TX accumulate sales tax credits, which they can then offer to customers through the dealer network. This usually happens at specified times.

    I haven't heard of a situation like you describe, as a requirement for tax credits. But, doing a single-pay lease will often reduce your money factor, which is one of the advantages.

    I don't see where the dealer gets an advantage from you doing a single-pay lease. Other than lowering the total cost, and possibly making it easier to get a sale.

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    ellie26ellie26 Member Posts: 6
    Hi,
    Please I need somebody's advise. I'm leasing a Higlander XLE 2019. I made a down payment of $2000 and I dont see it in the capitalized cost reduction. It is only $989 cash down + rebate $3000. They also included $600 after market accessories, the only accessory I got was the rubber matts and it should be included with the car.
    What should I do? Did I get ripped off? I signed the paper yesterday for the second time because they put 12k a year instead of 15k. So, they fixed it.
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    MichaellMichaell Moderator Posts: 244,993
    ellie26 said:

    Hi,
    Please I need somebody's advise. I'm leasing a Higlander XLE 2019. I made a down payment of $2000 and I dont see it in the capitalized cost reduction. It is only $989 cash down + rebate $3000. They also included $600 after market accessories, the only accessory I got was the rubber matts and it should be included with the car.
    What should I do? Did I get ripped off? I signed the paper yesterday for the second time because they put 12k a year instead of 15k. So, they fixed it.

    My guess is that the $1111 was used to pay the first payment, any up front taxes due, and fees. Can you post a copy of the lease worksheet for us to review?

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    larryd2550larryd2550 Member Posts: 1
    Hi! In your example of the $9000 residual value, you say the interest total would be less than $200 for the length of the lease. Using the money factor of 0.00015, what amount do you apply that to? Thank you. Larry
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    kyfdxkyfdx Moderator Posts: 243,132

    Hi! In your example of the $9000 residual value, you say the interest total would be less than $200 for the length of the lease. Using the money factor of 0.00015, what amount do you apply that to? Thank you. Larry

    Money factor is applied to a sum of the Adjusted CAP cost and the residual. The result is the monthly amount of the finance charges. Multiply by the term for a total.

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    MartyN2022_MartyN2022_ Member Posts: 1
    Hi Matt,
    I know this is an older article, but I'm wondering why the "drive off fees" increase when the down payment increases?
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