Should I put down money a new car lease?

One of my newest KTL leasing clients just asked me this:

Hey I’ve sent out the initial emails and received some worksheets and the one I’ve attached is the best offer I’ve seen (sent this worksheet out to 10-15 dealers). If I put the $1999 to get the $196 a month what are the chances I’m seeing that money or should I just go for with the $287 a month.

This is sort of inside baseball.

Let me explain:

In leasing lingo, a down payment is known as CCR (or Capitalized Cost Reduction).

I advise my clients to never put money down on a car…


We never go to a car dealership to get a new car.



Instead, we send emails to dozens and dozens of local and regional dealerships…

We ask if they would be interested in leasing a new car to us at a low monthly price that we choose – $0 cash down…

We come up with the price (based on a semi-scientific formula I developed).

Most decline. Some come close. And others say YES!

We ask for a lease worksheet. This is confirmation in writing of the pending deal.

My system was able to generate this lease worksheet for a brand new 2017 GMC Terrain:

2017 GMC Terrain lease worksheet 1


Yes. This beats the 1% rule. Of course it does – that is what my system is good at…

And yes. This lease worksheet includes a price in writing for a true sign and drive – $0 cash down lease…

But watch how devious this worksheet is

In our emails, we asked for a $0 cash down lease.

We did not ask for 5 additional options…

This worksheet offers 3 different down-payment options (over 2 different terms): $0, $1999 and $2999 down.

This is what car salespeople do… most ignore what we ask for and reply with deceptive “options”.

Of course, our eyes are drawn to the lowest payment of $150 monthly (which seems a heck of a lot cheaper than the $289 monthly payment we were looking for).

But here is the catch – we need to come up with almost $3,000.00 in cash!

Let’s run the numbers, shall we?

Car dealerships know most people hate math.

So they make it easy for us and run the math for us in a grid.


This is deceptive.


When we calculate the total cost of leasing a car using the 3-different options after 24 months, we get:

$6,936 <- $0 down
$6,703 <- $1,999 down
$6,599 <- $2,999 down

For 36 months, we get:

$10,980 <- $0 down
$10,747 <- $1,999 down
$10,667 <- $2,999 down

Now, when we take these numbers and figure out the total cost per mile (at 15,000 miles each year), we get:

24 months:

23 cents
22 cents
22 cents

36 months:

24 cents
24 cents
24 cents

The bottom line is putting down thousands and thousands of dollars saves us about a penny per mile.

That is all. Just a penny.

In simple speak, this is another dealership scheme to trick us into sending them thousands of dollars as a down payment for little benefit in return.

A down payment SEEMS to lower our cost, but we pay about the same amount against the lease contract over its period (ignoring the “rent charge” interest).

Even worse:

Most people think they get their down payment back at the end of the lease. They do not. Because a down payment is not the same as a security deposit.

Worser than worse:

If our car becomes a total loss at any point in the lease, the insurance company (almost always) sends a check to the leasing company for the current value of the car. And we are out of a car AND out down payment.

And by the way, the same is true with traditional financing of a car – a down payment is throwing money towards a depreciating asset… not good.

Instead, we can save $1,999 or $2,999 and invest it or pay down high-interest loans.

If you are looking for the best way to lower the monthly payment, reducing the car’s selling price is the best way to do it. And my leasing system shows you how to maximize all available discounts and incentives.

Bottom line: always lease a car $0 cash down. Always.