Single Payment Car Lease
Leasing has become extremely popular in America, as we get bored easily. We also tend to get attracted to things that are shiny and new, so it just makes sense to enter into a deal where we can get a new car every three years. The payments are usually lower than that of traditional financing, so it’s a great option for a lot of people. However, if you’ve got the liquid cash but don’t want to dump it into a car that you are going to have to try and trade or sell when you’re done with it, there is an option for you.
It’s not common, and it’s not exactly the reason that most people choose to lease, but there is the option of a single payment lease. Basically what this does is it allows people to avoid a monthly payment by paying the full price of the lease at the very beginning. For a lot of car buyers, it isn’t the ideal way the wish for things to happen because a lot of people don’t have that kind of cash up front. However, there are some people who would rather pay cash for a vehicle, and this is a better option if the circumstances are right. As with any situation, there are specific advantages, and disadvantages to a one pay lease, which is how you’ll determine if it is the right option for you.
- There won’t be any monthly payments to contend with. Since the entire lease is paid the day you take the car, you won’t have anything to worry about when it comes to the payment.
- The credit approval process is quite a bit easier. There’s very little risk for the finance company if you have the entire amount available right away. However, it will still require the involvement of a finance company.
- It’s actually cheaper than a traditional lease because you won’t pay as much in interest as you would with a standard lease. You can eliminate several thousand dollars’ worths of interest costs. The reason for this is because with a standard lease you pay the interest on what the car is worth when you drive it off the lot, while with a one pay lease, you pay interest on what the car will be worth at the END of the lease.
- There’s potential for a lower interest rate on a one pay lease as well. Some manufacturers are known for discounting the interest for someone willing to pay off the entire lease right then and there.
- With a one pay lease, you won’t have to worry about the residual value the way you would with paying cash for a car. When you buy a car outright, you’re ostensibly keeping that car for a longer period of time, but you don’t want the hassle of high interest or monthly payments. However, you do have the worry of what the car will actually be worth when you’re ready to get rid of it. With a one pay lease, you don’t have to worry. It won’t matter what the car is worth because you get to turn it in at the end of the lease period.
- It’s a lot of cash to pay out of pocket up front, especially considering that most people lease because there usually isn’t a high down payment required due at signing. Even people that have that kind of money want to spend it on other things, and not a depreciating asset.
- In the event of an accident or total loss, you may actually lose your money. The insurance company is only going to pay what the car is worth at the time, and not what you actually paid for it. With a standard lease, the financing company is responsible for the loss, because GAP will have them covered, but this isn’t the case with a one pay lease and you’ll lose out.
- The single payment lease will still report to the credit bureaus as a debt. Signing on for a one-pay lease doesn’t take away the financial responsibility as far as the credit bureaus are concerned.
- You still have to abide by the terms of a lease. While you’ve paid for the car up front, you’ll still have a restricted amount of mileage that you’ll be able to rack up on the car, and you’ll have to keep up with service appointments just as strictly.
Of course, there is no one size fits all approach to car financing, which is why there are so many options. In order to determine if a one pay lease is right for you, you’ll have to figure out what your priorities are when it comes to your vehicle and make the decision accordingly. If a one pay lease sounds right up your alley, mention it to your salesperson.