When buying a car, you need a down payment; this is relatively common knowledge. However, is a down payment required as well with a Porsche lease? Learn the basics of leasing and whether a down payment is part of the process.
Down Payments on a Leased Car
Car leases generally don’t require a down payment in the conventional sense. However, in the absence of Porsche lease offers, you are often required to pay the first month’s lease upfront along with other fees, such as taxes, acquisition, and documentation fees.
Cap Cost Reduction Explained
A capital cost reduction (cap cost reduction) serves somewhat the same purpose with a lease that a down payment would on a new or pre-owned Porsche vehicle. For example, if the lease total is $7,000 over 36 months, you pay roughly $195 each month. However, if you pay an additional $3,000 upfront, you owe $4,000, lowering your payments to $112 per month.
With cap cost reduction, you pay more upfront than the above fees to lower your monthly payments. Trade-in values are a common way to “find” cash for this payment.
Should I Pay More Upfront?
We recommend a higher down payment in a car purchase because it lowers the loan amount, thereby reducing the accumulative interest rate. You still pay the same total amount with a cap cost reduction even though you’re paying less monthly. Remember, however, that you may be required to pay a cap cost reduction to be eligible for a lease if you have a low credit score.
Visit Tom Wood Porsche to see our inventory. Our dealers can walk you through the lease process and answer any questions you may have.
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Finance