Reducing Your Leasing Interest Rate with Multiple Security Deposits
When you lease a vehicle, you are paying only a portion of its value. The remaining amount is called the residual value.
For example, let’s say we have a new vehicle that costs 30,000 $ (everything included) and that has a residual value of 50 %. If you lease it over four years, your monthly payments will be based on 15,000 $ plus interest, instead of the full 30,000 $. Once the 48 months are up, you can choose to buy back the car for 15,000 $, or give it back and get a brand new car.
There are several advantages to leasing, including lower payments and the opportunity to change vehicles relatively frequently without being overly punished by depreciation. There are also some great fiscal advantages for business owners. We will get into those advantages in future articles, but for now let’s look at an easy way that you can further lower your payments with leasing.
When you lease a vehicle, you give a security deposit that is refunded at the end of the lease provided there are no outstanding damages to the car. That security deposit is usually equal to the amount of the monthly payment.
But did you know that you can give multiple security deposits in order to lower the interest rate of your lease? In other words, each security deposit lowers by a certain percentage the interest rate on the contract. So let’s say that you are allowed to give 10 security deposits and each one lowers your interest rate by 0.1 percent. If the value of each deposit is 300 $, you can give $ 3,000 at the beginning of the lease and lower your interest rate by one percent.
That means a significant difference in the monthly payment of your lease. Then, at the end of the lease, you get the $ 3,000 back! That’s just another advantage of leasing.
To learn more about multiple security deposits and how leasing makes it easier and more affordable than ever to get into a brand new car, contact Stoney Trail Mazda today!