➤ Not refundable
➤ Goes towards overall cost of the lease
➤ Range of deposit options
➤ No deposit lease deals available
Is It the Same as the Down Payment?
Initial rental. Deposit. Upfront cost. Down payment.
In the car leasing game, they all mean the same thing.
Can I Get a Lease Without Putting Down a Deposit?
We get it. Not everyone wants to put down a large sum of money upfront or has the financial means to do so.
How much you put down is entirely up to you. At LeaseLoco, you have the following options:
- 1-month deposit
- 3-month deposit
- 6-month deposit
- 9-month deposit
- 12-month deposit
View our no deposit lease deals
Do I Get My Initial Rental Back?
No, because your initial rental payment isn't a deposit in the traditional sense.
But that also doesn't mean it's 'dead' money or that it's only there as an incentive for the leasing company to accept you.
No siree. Your initial rental (if you choose to put one down) helps pay for the total cost of the lease, meaning it's simply subtracted from the total price.
How Is My Initial Payment Calculated?
No complicated sums required here. Just a bit of basic math.
Let's say you have your eye on a lease deal that costs £250 per month. Your initial payment would be as follows:
- 1-month deposit (1 x 250) = £250
- 3-month deposit (3 x 250) = £750
- 6-month deposit (6 x 250) = £1500
- 9-month deposit (9 x 250) = £2250
- 12-month deposit (12 x 250) = £3000
Will a Bigger Initial Rental Make My Monthly Payments Lower?
Yes, paying a higher initial rental amount lowers your monthly payments.
That's because you're putting down a bigger chunk of the overall lease cost right at the start, so it can be a good option if you have access to a large sum of money upfront.
Can a Bigger Initial Rental Help Me if I Have Poor Credit?
Yep, another plus point.
Putting down a larger deposit means you'll be borrowing less money from the leasing company and you will therefore be deemed less of a risk to them.
That said, it's still possible to be accepted for a car lease even if you have bad credit, and even if you don't put down a big initial payment.
For example, you could provide a guarantor. This is someone (usually a relative) who 'guarantees' to step in and continue making the payments in case you run into financial trouble and can no longer afford them.
Find out more about leasing a car with bad credit
When Does the Payment Go Through?
Your initial payment is normally paid directly to the finance company via direct debit, and usually within 14 days after you take delivery of your lease car, though in some cases you might pay it before that (depending on the specific company).
Delivery generally takes 2 to 4 weeks for in-stock vehicles, and 2 to 4 months for factory order deals.
Can My Deposit Be Transferred to My Next Lease?
No, your deposit can't be 'carried over' to a new lease.
Remember, the upfront payment actually goes towards the cost of your current lease agreement, meaning you'll have to put down another deposit for a future one (or not put one down!).
Does a Maintenance Package Impact My Initial Rental Cost?
Including a maintenance package in your lease can be a convenient way to manage routine servicing and repair costs throughout your contract.
Whilst it does add to the overall lease price, the cost is spread across your monthly payments. As a result, your initial payment may be slightly higher to reflect the added cost.
Summary
What have we learned?
Whether you put down a higher initial payment or a lower initial payment can have an effect on your monthly payments, so it depends on whether you want your monthlies to be lower or whether you want to spread more of the cost across the entire lease term.. A higher initial rental can also help make up for a poor credit score, though it's not the only way.
So . . . do you pay more upfront and less per month, or less upfront and more per month?
Head over to our car lease deals and make your choice.
FAQs about your Initial Rental
How does initial rental work on a car lease?
Asking yourself: what is initial rental in car leasing?
Also known as the initial payment, the initial rental is an optional down-payment at the start of your lease agreement. Unlike a traditional deposit, you don't get it back at the end of your agreement. Instead, it goes towards your car lease and is subtracted from the total cost.
What happens to your initial down payment on a lease?
The initial payment on a car lease isn't a deposit in the traditional sense, as you don't get it back. Instead, it goes towards the overall cost of your lease. That means you also can’t 'transfer' it on to your next lease.
Can you lease a car without initial payment?
Often called a 'no deposit' or 'zero deposit' lease, you can absolutely avoid having to pay a large deposit at the start of your lease contract. This can work out to be the more flexible option if, for example, you don't have access to a large sum of money upfront. Just be aware that your monthly payments may be higher as a result.