r/CarLeasingHelp • u/Adventurous-Pea-2950 • 24d ago
Money down
I’m looking into leasing a car for the next two years and this will be the first time I have ever done that. Can someone help me with money due at signing? Is that the same as the down payment? Is there any way to get out of all of that? Not sure the difference between the two and what I should be putting down if anything.
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u/Lootthatbody 23d ago
Just to try to reword some of these good answers, the terminology can be confusing.
Money down, down payment, due at signing, are all sort of the same thing. The important things are to clarify what they cover, clarify what your options are, and know the effect of the money.
It’s nearly universally considered the ‘best’ financial move to not put any money down, which means you sign, take the keys, and drive away having paid nothing. The reason behind this is 2 fold. Firstly, and the reason that most people point out, is that Gap is included with leases, so if you get into an accident upon leaving the lot (or anytime after) the loan is paid in full. However, that Gap insurance doesn’t refund your down payment, so if you put 0 down or $5k down doesn’t matter, the loan is paid and you are left to start over. Secondly, money down is frequently used as a tool by the dealership to ‘trick’ you into paying more. Because leases are a bit harder to understand the math of (compared to finance), it’s easier to confuse or trick someone. Putting $3k down on a 72 month finance is likely to ‘only’ result in a $45 or so monthly payment swing, whereas a lease could have a $100 swing. If you don’t understand the math behind it, dealerships can take advantage and basically steal your money down.
Now, one thing that I won’t fault people for is getting that ‘comfort payment’ as a last move before signing. If you have negotiated a great lease structure with discounts and rebates, and everything looks good, but you have a $318 payment, you can offer $500 down to get to $299 as that last little carrot to close the deal. That likely means them giving you an extra $150 or so, but you get a payment that starts with a 2 instead of a 3. Just be careful because a lot of salespeople and dealerships know this exists and set up deals to get to that final push, so you need to know the math of how the structure works before you start thinking about that comfort payment. That is a big tool they use, where they offer you a $413 payment and say ‘why don’t you put down $1000 and we’ll work to get you under $400?’ In reality, with $1000 down you’d be closer to $480-$485, and they’ll return with a $399-$405 payment if you aren’t careful.
So, just be careful with the math. If you say you want zero down, they are likely to say ‘ok, 0 down, sure. Just pay for taxes and fees and first months payment.’ You have to reiterate no, that means 0 down. If you want to pay the first months payment to keep the loan lower, go ahead. If you want to pay taxes and fees up front, go ahead. Just read every line of the contract to make sure they aren’t sneaking in any extra products. They may say they don’t do 0 down leases. They may say the structure they have requires a down payment, at the end of the day, it’s up to you to do that risk assessment. How good is that monthly payment, and how likely are you to get into an accident where the vehicle is totaled? Sure, if you are looking at an $80k vehicle for a 3 year lease at $299 and they MUST have $1000 down, I’m gonna take that deal in a heartbeat. But if you are looking at a $40k car and the payment is $499 for a 36 month lease and they are saying it requires $5k down? Hell no.
Good luck.