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Vehicle Lease vs Buy/money down on leased car


QUESTION: I've read that when leaing a new car from the dealer, you should avoid 'cap cost reduction' and not put any money down whenever possible. It said you are making a down payment on property that isn't yours, and if the car were totaled that money down would be out the window. I also understand that if you put a lot down to get lower payments, it's about the same in the long run as putting nothing down and making higher payments. It would be a gamble, but what if the car is never totaled and someone can easily put down a lot more ($5k or more) and they really want a lower monthly obligation... is it still inadvisable to do that?  Thanks


The simple answer to your specific question: is it advisable to put money down if the goal is a lower monthly payment.  

Look at the total downpayment that you are considering, and add it to the total of monthly payments that you will be making during your contract.  If that number is the same or less than what you would spend otherwise you may want to go that route.

If a lower monthly payment is the goal, ask yourself whether or not that specific goal is more important than the over all savings.  If the answer is yes, than money down is the route you should take.

Also look at a "one Pay" lease.  Pay all of your payments up front with zero monthly payment.  There is a savings there as well.

Cheryl Bowman

---------- FOLLOW-UP ----------

QUESTION: RE: if the car is totaled during that period, is it correct that I would be out the full down payment? Should that be a major factor in deciding how much to put down or not to put down?  Thanks

If the car is totaled during the lease you will be able to walk away from the contract.  Yes Lee, it is true that you will leave your down payment and monthly lease payments on the table.  The same as you would in a finance or cash deal.  

To answer your question; The amount that you put toward your purchase should not have any correlation with weather or not the vehicle is a total loss.  

Vehicle Lease vs Buy

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Cheryl Bowman


I can answer all questions about financing lease vehicle in the state of Va & Nc. most questions in other states with the exceptions of any rules or regulations governed by that particular state.


I have more than 25 years as a sales associate, along with a finance back ground and fleet sales. I have participated in assisting clients with both retail installment contracts and lease contracts both open and closed end leases.

I currently affiliated with the Mercedes Benz Car Club of America. I am also employed with McGeorge Mercedes Benz in Richmond Va.

Publications Blog for 40 Plus professional women.

I have has extensive training in sales, finance, customer service while assisting clients during my 25+ years in the business. I am currently working on master Certification for Mercedes Benz and have already been certified in other high line brands. Training is on going as the products and technology are always changing.

Awards and Honors
Sales Certifications, and Master Certification with other high line brands. I have also been master certified with domestic products.

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