Is leasing without a down payment possible?
When leasing without an upfront payment, which is also referred to as down payment or initial payment, there is no payment of a lump sum at the beginning of a leasing contract. The first leasing rate then only encompasses the usual monthly rate.
Some leasing companies allow leasing without a down payment, especially if the lessees financial situation is stable. However, no down payment also means that the monthly rates will be slightly higher.
In some cases, the lease of more expensive cars may require a down payment encompassing a certain percentage of the cars price.
It is advised to, if possible, never exceed 30% of the car’s purchase price with the down payment - or to just keep it as low as possible.
There are two reasons for this:
a) The main advantage of leasing, keeping capital instead of investing it into a car, is lost.
b) If the car receives total damage, the down payment cannot be reclaimed.
Nevertheless, the sum of the down payment depends on the customer’s wishes and the leasing company’s regulations.
Synonyms: Upfront Payment, Initial Payment