Misconceptions About Leasing: Multiple Security DepositsFeb 12th, 2018
You may have heard the common misconception if you’re planning on keeping the car, finance it because it’s cheaper. This is not always true. For those of you that are shopping for a lease, there are a few benefits that you may not be aware of. With Toyota, multiple security deposits allow customers to save money in more than one way.
How Does It Work?
The security deposit in a lease is a payment paid in advance to protect the leasing company against damage to the car or nonpayment to the lease. A multiple security deposit however, aims to lower your monthly payments by lowering your interest rate. Toyota allows customers to give up to 10 security deposits. For every extra security deposit given, 0.15% is taken off the annual interest rate in return, reducing your monthly payment. So, if you give all 10 security deposits, you can cut your interest rate down by a total of 1.5%.
The flat security deposit amounts are determined by analyzing current payment ranges at a standard rate. The flat rate security deposits vary by model.
Let’s take a look at an example of interest rates at Attrell Toyota:
In respect to the flat rates provided for multiple security deposits, a 2014 Corolla LE CVT lease would cost $280 PER month for 60 months @ 2.9%. However, depositing 10 times the security deposit of approximately $3000 ($300 for Corolla x 10) would bring the interest rate down to 1.4% making the payments $260/month (according to Toyota.ca).
Although the requirement here is some additional cash, the concept is to take advantage of the program designed for borrowing. So, if you’re looking to lease a car, and have some extra cash on hand, there is no better way to invest your money.
It is important not to get multiple security deposits mixed up with down payments. With Toyota, the total security deposit is refunded at the end of the term providing that the vehicle is in the condition agreed upon, whereas you do not get a down payment back. Worth it? Absolutely.
The fact that you get your lease rate and monthly payment reduced and get all the money you invest back, is what makes this program worthwhile.
So for those of you shopping for a lease, make sure to ask us here at Attrell Toyota about the benefits of increasing your security deposit. It could save you thousands over the term of the lease.
We hope this guide gave you some more insight and it will help you achieve a lower payment.