Suppose I were to go to a dealer and lease a new car. And suppose I wanted to pay for the entire lease up front on the day of the lease. Would I have to pay the money factor? Or could I get a money factor of 0 because I am making all of my payments up front. Please let me know if you are wise to this kind of thing.

 

Short Answer:

I don’t think that is possible or financial smart. Can you get a better return with it elsewhere?

Long Answer:

The money factor is very similar to the APR of a loan.

From my experiences, lease deals have a maximum amount you can deposit down. They want the interest.

There are ways to work around this problem indirectly, if you want to put down such a large payment. Spread the money within down payment and at least two security deposits. Your MF will drop and your payments should be very, very low; under $150. At the end of the lease, you get the security deposits back, less damages to the car. You do not earn interest on your security deposit; they do, so you still indirectly pay an MF which varies now.

Normally it is not wise to tie up money if you can earn equal or better interest on set capital elsewhere.

I am not an expert on the subject.

 

OOO..so you want to get a lease deal with zero MF and pay on the day of delivery. I don’t think they can do this. Either way you go at it, you will pay some form of MF, I believe. But I am sure you can just send in the entire lease payments to Infiniti Financial and receive bills for $0.00 every month.

 

I know BMW allows clients to pay the cummulative amount of all the leases up front, I don't see why IFS, or any other bank wouldn't. Also, at lease inception, talk to the sales manager about placing as many Multiple Security Deposits as the lender allows.

 

+1

You can do what is called a "one pay lease", where you pay the entire lease up front, and just drive for the term of your lease, and then return the car as normal.

The MF does drop.

 

But the MF will not become zero; right?

 

No, it will not.