View Full Version : Lease Question About Large Down Payment

08-12-07, 10:04 AM
Is it true that if you put down a large payment on your lease, in the event of a severe accident that the insurance payment goes to GM and that your payment is lost?


08-12-07, 04:07 PM
That would kind of make sense, I guess.
You are talking about the car being totaled, right?

I wonder if there is gap protection on a lease?

There is another way you can lose some of your downpayment.
If you take the lease pull ahead option after say, 29 months of a 36 month lease, then you are in effect losing some of the money you put down to get a lower payment.

You will get a refund on the rent charges though.

A lot of people feel you should put no money down on a lease. I did this on
my first SRX. Did "sign and drive" at $459mo, then rolled a couple of grand of my upside down Impala in and got a $523 payment for 48 months.
Had the car for 40 months and GMAC paid my last 4 payments and I have
a '07 w/ a $367mo. payment and wrote a check for $4700.
So I never actually fully paid for the couple of grand I was upside down on the Impala.

There are some people who lease that are ultra conservative. They will actually do the single pay lease where you pay the entire lease amount at time of purchase and they pay NO interest.
Keep in mind that the interest is calculated on the cap cost, not what you use.

Do any of the dealers on here have an answer to the OP's question.

08-12-07, 07:27 PM
If the vehicle is totalled or stolen, your insurance company pays the loss to the Vehicle Owner. In the case of a lease, that would be the leasing company. If you can afford it, never put any money down on a lease unless you like to "shoot craps". I just did my fifth lease in the last 10 years and have never put a dime down. That lease is on a '07 SRX whose MSRP was $51,165. After all of the GMAC "deals", my monthly payment is $644.99 (includes state tax) for 39 months.


08-14-07, 05:58 AM
OK, but then when the lease company gets the insurance co. check, don't they have to buy you a replacement car for the balance of the lease?


Da Dark Jedi
08-17-07, 11:57 PM
Hey MikeK, why would you not put money down? "If you can afford it, never put any money down on a lease unless you like to "shoot craps". I just did my fifth lease in the last 10 years and have never put a dime down."

Please explain the logic behind the thought.

08-18-07, 07:59 AM
Da Dark Jedi: Your down payment or in the words of a lease "Capital Cost Reduction" can be used for better investments than a depreciating asset that you're not buying. Any money that you put down, in the event of a total loss, you will never see again. Your insurance company will pay off the value (generally including any gap) to the leasing company. Remember, that value is the depreciated value of the vehicle and any monies put down are gone. They only have to replace your vehicle up to that depreciated amount. I look at leasing as a way to have a new vehicle every 3-4 years and keeping my principal in an appreciating asset. Like I have said....no money down if you can afford it.


Snow Thrower
08-18-07, 10:26 AM
Why put the money down? Just keep it in the bank and make the monthly payments with the money you were going to put down. I'm leasing a 2008 Mercury Sable and i will not be putting anything down.

Da Dark Jedi
08-19-07, 05:43 PM
So, what makes a down payment a requirement? Is it to keep monthly payments low? Does some dealer's require it?

08-20-07, 06:50 AM
Da Dark Jedi: The only down payment requirement would occur if a dealer has a "special" lease offer ad at a low per month rate. Check the fine print and he probably requires a "Capital Cost Reduction" which is the down payment. Typically when leasing with no money down, one pays at closing one month's lease payment, sometimes a security payment which you can easily get waived, tax, title and doc fees and an acquisition fee charged by the underlying leasing company.


08-20-07, 08:58 AM
If you have decent credit you can actually drive the car off the lot without writing a check for anything.
Just roll the aquisition cost, taxes, doc fees, etc into the payment.
But with a 36 month lease it costs you about $29-30 for every $1K you borrow, so it is pretty expensive.

I put money down on my '07 SRX because I was going after a payment number. My 3month old GTO is at 0% and is $528mo., the SRX is $367mo so I am under my goal of $900mo for both vehicles.

To answer your question: the purpose of puting some money down is to lower the payment to a predetermined amount the looks attractive in an advertisement.

Da Dark Jedi
08-21-07, 05:43 PM
What is meant by "DUE AT SIGNING"... If the ad says no money down, then where does this go to? This is from the Cadillac web-site.

08-21-07, 05:55 PM
just another way to get $595 out of you for "destination charge"

Don't accept ANY down payment. Just tell them someone will give you a car for nothing down, or else you walk.

Da Dark Jedi
08-21-07, 06:33 PM
Well here's what Cadillac says...

"SRX V6 with Ultraview RoofUltra-Low Mileage Lease for Qualified Lessees
$413/month* 39 month lease $2,463 due at lease signing, no security deposit required. Tax, title, license and dealer fees extra. Ultra-low mileage lease with mileage fee of $.25 per mile over 10,000 miles per year".

So would the above be a "DOWNPAYMENT", since no security deposit required?

Would it be refunded at lease end, or a portion of it?

08-21-07, 07:46 PM
No you don't get any of it back.
If you were to take a lease pull ahead towards the end of the lease you would save some rent charges and that woulld be refunded.

If you didn't put the $2600 down that lease would be about $470-480mo instead of $413mo.

IMO $413mo. is cheap for a $39,000 luxury car.
Try leasing a $39K Lexus for $413mo w/ 2600 down.
GM is a subordinating these leases w unrealistically high residuals and will
get hammered when these cars go to auction.