Is there a difference between a deposit and an initial payment?
An initial payment is required when you lease a car. This is also known as a deposit or an initial rental but they all generally relate to the same thing.
The money you put down when you start a lease contract is non-refundable and is required firstly to show your finance provider that you are a no risk customer and secondly to help lower your monthly payments.
It’s entirely up to each customer how much they put down as their initial payment/rental or deposit. Obviously, the more you put down at the start of your contract, the less your monthly payments will be over your chosen lease term, or you can choose to put down less but this will mean your monthly payments will be higher.
Whichever way you go, you will still pay the same amount over your chosen lease term.
So basically, the deposit or initial payment/rental helps reduce your monthly payments as well increasing your chances of being approved for finance with your chosen provider.
The word deposit is used a lot but really is used incorrectly, as most people associate a deposit with something you get back at the end such as when you rent a property. However, when you lease a car this is not the case as the deposit, or initial payment/rental is non-refundable and taken for very different reasons.
The correct terminology is that you pay an initial payment/rental at the start of your contract which is non-refundable and goes towards reducing your monthly payments, as well as showing your finance provider that you’re not a risk.
Please click here to find out more about our business/personal car leasing services and fantastic offers, or give us a call TODAY on 01904 55 75 44.