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Watch Out When You See $0 Down Leases

November 25, 2010

Zero down leasesIs it possible to lease a car with no down payment? Absolutely.

But the monthly payment will be higher since you are not pre-paying some of the lease obligation.

In general, you can expect your lease payment to increase by about $40 for every $1,000 you don't make as a down payment.

When signing the papers for a lease, you pay a down payment (or not), sales tax on your down payment, your first month's payment, possibly a security deposit (which you get back at lease-end), and any official fees required in your city, county, or state.

This is called "amount due at signing." But notice that your down payment (if any) is only a part of the total "amount due at signing". This important point is often not well understood.

This means that there can be differences between lease deals that offer $0 down or no down payment.

Even if you make no down payment, you may still pay the other fees. However, in some "$0 due at signing", not only do you pay nothing down but the other fees are rolled into the lease. You still pay for them in the long run, but you don't pay them up front in cash.

My Recommendation for Car Shoppers

TrueCar, Edmunds, and 1-800 Car Show are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

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Gregg Fidan

About: Gregg Fidan


Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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