Quote:
Originally Posted by SkykingUSA
You are correct, but the idea with a lease is that you are "renting" the vehicle. Therefore, if you drive off the lot and a week later you are in an accident and the vehicle is totaled by the insurance company, then how much have you spent to that point? In your case, you have spent $5800 which you will likely never get back. However, if you roll everything in to the payment, you would have only spent around $1,200 (1 monthly payment).
Granted, if you prioritize having the lowest monthly payment, then put as much down at signing as you like. Just be aware that you run the risk of losing that money in the event of an early totaling of your car. Another benefit to putting more money down is that you don't pay a money factor (MF) on that amount (basically interest). I believe the MF only applies to the amount remaining to pay on the lease after your amount due at signing is paid. Essentially you spend less on "interest" by putting more down.
Either way can be good for you because everyone has different priorities, but it is widely recommended that you put as little down on a lease as possible so you are not out a lot of money in case the car gets totaled early in the lease. It's just a way of spending the least amount of money in the event the car gets totaled.
I hope that helps, so you can make a decision.
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Agree with this analysis totally. The less you put up front on the lease, the better financial sense it makes.