Leasing a car offers many benefits especially if you are on a budget. That’s because it lets you have a car for a considerable amount of time without needing to pay as much money as you would need to buy a new car. Yet, most lease deals require you to pay some money upfront.
When you get a leased car, you are agreeing to make monthly payments to cover the capitalized cost of the car. However, that upfront money you need to pay, which is called a “down payment,” can be overwhelming at times.
That’s the reason zero-down car leases are available for you. Getting a zero-down car lease eliminates that down payment and lets you drive your newly leased car without needing to pay anything that day.
However, there are many things to understand about that matter. Dive into this page to learn how zero-down car leases work!
What Is a Zero Down Car Lease?
A zero-down car lease is a lease deal where you don’t have to make a down payment on the first day. That means you can get your leased car and worry about your monthly payments later. Getting these kinds of deals gives you time to get money for your monthly payments.
How Do Zero Down Car Leases Work?
Not paying anything for your leased car can seem utopic, but these deals exist. However, they’re not as inexpensive as you may think they are. Not making a down payment for a leased car doesn’t that you don’t have to pay that money at all.
To understand that, you have to know how certain terms work. As said before, you make monthly payments when leasing a car. That’s because you need to pay for the capitalized cost of the car.
When talking about the capitalized cost of a car (also known as its cap cost), you mean the price of the car being leased and additional expenses included in the lease contract. However, you can reduce a car’s cap cost by making down payments. That’s the reason down payments are often called a capitalized cost reduction.
That means that if you pay more money upfront, you pay less monthly. When you get a zero-down car lease, the thing goes backward. Since you are not paying any money upfront, your monthly payments increase. That’s what we mean when we say you still have to pay for that money at the end of the day.
Summarizing it all, you can avoid down payments when getting a leased car. Yet, that means you need to pay more money monthly.
Can I Get a Leased Car Without Paying Anything Upfront? Types of Zero-Down Car Lease Deals
The answer is not always. Most times, even if you get a zero-down payment, you still need to pay for some things before getting the car. Those things can be dealership fees, the sales tax, and the car’s first-month payment.
Regardless of that, there are some cases when you can avoid making any kind of payment the first day you get a leased car. That’s because there are three different types of zero-down car lease deals. They are:
Not Paying Anything the First Day
As said before, you can avoid making any kind of payment on the first day. That happens because the dealer rolls all your fees and sign-in expenses in your monthly payments. When this happens, you don’t pay for anything the first day but cover those expenses monthly.
Paying for Fees and First Month Payment
In these cases, there is no cap cost reduction. You don’t have to make a down payment. Yet, you have to pay dealership fees and the first month’s payment.
Not Paying for your First Month
When this happens, you pay for dealership fees, but the first month’s payment is rolled to your monthly payments.
The Company Pays your First Month Payment
Some companies offer to pay for your first month’s payment as part of the deal. That way, you can go off by only paying for dealership fees.
Bottom Line – Should I Get a Zero-Down Payment?
The short answer is yes. Even if you need to pay more money monthly, zero-down payments let you avoid those out-of-the-pocket payments that can be so overwhelming at times. Apart from that, it helps you avoid paying for the upfront sales tax at that moment by allowing you to pay for it over time.
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