Security Deposit and Leasing

[spades]

Hi Guys,

I am just wondering if any of you have good/bad experiences with putting down a deposit on a lease. If you have the money would it be a smart thing to put down? Is it easy to get back?

I do plan on giving the car back at the end of the term. This leasing company is Nissan Canada, so if you have any experience with this please share.

[510-Trevor]

The more you put down, the less interest you will have to pay over the run of the lease. Now if the lease is 0%, keep your money unless you just want to lower your monthly payments.

[spades]

I should have added that, unfortunately lease rate is not 0%. Its 4.9. I have also been back and forth between the Accord, haven't really looked at the lease rates from Honda though.

Is it a smart idea to lower the payments this way? I am mostly concerned about not having to jump through hoops or pay fees at the end to get it back.

[jdmXSI]

keep in mind for every thousand you put down it will affect your payment 18-20$ a month. I wouldn't recomend money down on a lease. The question you need to ask yourself is $2500 or $5000 down up front worth a lower payment of 50-100/month?

[Eleanor]

Originally posted by spades
Is it a smart idea to lower the payments this way? I am mostly concerned about not having to jump through hoops or pay fees at the end to get it back.
Ummmm, you don't get it back. The whole point of the deposit is to lower your monthly payments. You don't get your deposit back and lower payments, son.

[spades]

Originally posted by Eleanor

Ummmm, you don't get it back. The whole point of the deposit is to lower your monthly payments. You don't get your deposit back and lower payments, son.

I could be wrong here, but wouldent that be the exact same thing as a down payment and defeat the purpose?

The way I understand it is pay a security deposit (~2500) in which will lower the rate, and that will lower interest being paid over the lease term. This was explained to me as I would be entitled to my deposit I put down once the lease was over by A) if traded back in the money would be returned in full or B) Count towards my buy-back.

I dont have much experience with it so Im not too sure.

[Redlyne_mr2]

Originally posted by 510-Trevor
The more you put down, the less interest you will have to pay over the run of the lease. Now if the lease is 0%, keep your money unless you just want to lower your monthly payments.
Yes and No . For the most part security deposits are held to ensure that if any damages are incured on the vehicle that these damages will be paid by the security deposit at the time of lease maturity. Now, some finance companies will allow your secutiry deposits to buy down the interest rate however Lexus is the only one I've heard of that allows this. As far as I know Nissan financial services does not allow this. In a perfect world you don't want to have to put down any security dep

[510-Trevor]

I've never had that offered to me, but it doesn't sound like a good plan.
It just gives the dealer more power over you when you return your car, eg. "We'll transfer your full deposit onto a new car and give you a break on the exessive wear and tear you put on this car."
Like you said, you will be forced to jump through hoops to get your money back.

[spades]

Thanks Redlyne,

When talking to the salesman he offered me if I wanted to put a security deposit down and it could buy down the interest rate for the lease term. He went on to say it would be completely refundable if you decide to return the car at the end of the lease.

For the car I'd like to buy its definitely not mandatory that I put down a deposit. I could put zero down and walk out like I originally planned but when he offered this it got me thinking it could be a good way to lower the interest PMT's

[nbaker00]

Originally posted by spades
When talking to the salesman he offered me if I wanted to put a security deposit down and it could buy down the interest rate for the lease term. He went on to say it would be completely refundable if you decide to return the car at the end of the lease.


Sounds weird.. Don't think you will get your down payment back..The security deposit yes...


All your doing is paying the interest upfront... if the interest costs you $4000 over a certain term at a certain percent, all you do is put $4000 down and now you have 0% interest! (Will lower your payments but who cares if all you are doing is turning the car in when you're done)

[Redlyne_mr2]

Ok.. right on thanks for clarifying. To be honest, The choice comes down to your money what sort of return you could get off of it. If you put down $2500 in security deposits how much money is it saving you over the next 3 - 4 years. If you put that $2500 into a high interest savings account or investment what return will you see from that money over the next 3 or 4 years? Look at both of those options and that will help you come up with the solution. The drop in payment will be minimal unless the buy down rate is substantial (which it usually isnt).

[Supa Dexta]

Yeah.. Interest still needs to be paid for the term. If you have a 5 yr loan and are paying the thing off within a yr or 2, your only option is to talk to the bank and see if they will re work it to lower the total interest owed. Otherwise all you've done is is paid off the entire amount, quickly, but still fully.

[spades]

thanks guys, dont think i'll be doing it, not really worth it when its all said and done.

[Sorath]

i work at a honda dealership, if u put a security deposit 7 times the monthly payment u lower the rate by 1.5% and at the end of lease u get the money back