Leasehacking 101: What $0 Down Really Means
Zero down payment doesn't mean $0 due at signing
A down payment is the amount paid upfront to reduce the amount financed over the course of a lease. Even with a $0 down payment lease, there are still fees and other expenses to pay before you can drive off in your new car:
first month's payment;
license and registration fees;
taxes; and
document fees.
These drive-offs or inceptions, as they are sometimes called, can amount to thousands of dollars. You can request to roll the drive-offs into the monthly payment if you want a true $0 drive-off lease.
Read the fine print carefully!
Dealer and manufacturer advertisements omit taxes and fees when they use the term due at signing amount. By contrast, all Leasehackr Pre-Negotiated Deals disclose the estimated cost of taxes and fees based on the vehicle’s location.
The best thing to do is to read the fine print carefully. When asking a dealer for pricing, confirm that the quote includes all applicable taxes and fees. You can provide your ZIP code so the dealer can calculate fees accordingly.
Here's an example.
Take a look at this ad below from a dealer:
Fine print: "Low-mileage lease for well qualified lessees. Lease a 2018 Alfa Romeo Giulia for $305 for 24 months. Bank acquisition fee of $595, tax, title, license & first payment due at signing. Must qualify for FCA returning lessee rebate or put an additional $500 down at signing. 10,000 miles per year ..."
From a glance, one might expect to pay $0 out-of-pocket and $305 per month thereafter. If you read the fine print, however, you'll see this doesn't include the standard drive-offs, or even the bank acquisition fee of $595. Moreover, it assumes use of a $500 returning FCA lessee rebate.
Once you add up the taxes and fees, the amount due at signing will be over $2,000 for a non-FCA lessee
Another example, this time from the manufacturer.
Here's a "lease special" on a manufacturer's website (it's actually close to full price, so it's not that special) that uses the terminology due at signing. But again, the actual amount paid upfront will be greater than the advertised amount:
Fine print: "Security deposit waived. Plus tax and license ... 12,000 miles per year. Lessee to pay $209 a month for 36 months with $1999 drive-off ..."
In this case, the ad includes the $209 first month's payment, $650 acquisition fee, and a $1,140 down payment in the $1,999 due at signing amount. However, after taxes and registration fees, the actual drive-off will be closer to $2,600 (assuming Los Angeles County taxes).
In sum, it's important to keep in mind these differences as you browse ads and receive quotes. One deal might look better than the other, but after accounting for upfront costs, it might actually be the worse deal.
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Posted: September 1, 2018 (Last updated November 10, 2024)