Car Leasing 301 - Initial Car Lease Costs

First Lease Payment and Deposit In Advance

Upon signing the lease agreement, the first payment may be due, in addition to the security deposit. Unlike loans, the lease payments are due in advance of the month, not at the end of the month.

Capitalized Cost Reduction

Some leasing companies will allow the consumer to lower their monthly lease payments on their car by allowing a one time payment on the vehicle lease agreement to reduce the cars ‘initial capitalized cost’. The capitalized cost of a vehicle is the total cost of the vehicle, including fees and charges; insurance, maintenance contracts, options, etc.

When purchasing a new or used car and acquiring a loan to make a lump sum down payment to reduce the monthly payments (define: base monthly payments), negates the attractiveness of vehicle leasing – little cash is needed to be put forth. An alternative might be able to trade in your current vehicle to defray the capitalized cost reduction amount.

Part III: Sales Taxes & Insurance