Zero Down Car Lease

zero down car leaseLeasing can provide an affordable option to anyone needing car financing at minimum monthly cost. Upfront cost can also be minimized by paying no money down — $0 down payment.

Lease payments are 60% – 110% lower than loan payments for the same car. And most leases can be obtained with zero money down— $0 down.

So what’s the catch?

First, leasing is a bit more complicated than buying a car with a loan. If you don’t understand how leasing works, or how to determine if it’s right for you, you should skip it until you take the time to learn about leasing — from LeaseGuide.com.

Second, in order to get a zero down car lease, you need a good credit score. In fact, you may need a better score than you would need if you were buying with a loan. You should always know your current credit score before going car shopping.  What’s your FICO score? Find out now when you check your credit report for $1 at Experian.com!

A down payment in car leasing is called “cap cost reduction.” Even if you choose to make no down payment (zero cap cost reduction), there may still be other fees that need to be paid in cash at the time of lease signing, since down payment is only part of the up-front cash required.

What are the other fees?

First, leases always require that the first month’s payment be made, in cash, at the time of lease signing. Also, there will be the normal official fees required in your state and county for tag, title, and registration fees. In some cases, you may also be required to pay the lease acquisition fee up-front (in some leases, it’s included in the capitalized cost and financed along with the lease), or possibly a security deposit.

Car companies sometimes offer what are called “sign and drive” leases in which there is no down payment, no first month’s payment, and no security deposit. See $0 Down Car Leases are Back for more details.

What are the pros and cons of a zero down car lease?

The benefit is that it allows you to minimize your initial cash outlay to get into a brand new car.

The downside is that your monthly payments are a bit higher than if you had made a down payment.

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