$0 Down Lease vs. Sign & Drive Lease Differences

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

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, Senior Pricing Analyst - July 18, 2019

While $0 down and Sign & Drive leases may sound similar, there are some key differences worth knowing about. $0 down generally refers to the fact that no down payment is required. However, the truth is that you'll probably still have to cover the Acquisition Fee and first month's payment. In contrast, Sign & Drive offers the benefit of waiving the acquisition fee and first month's payment. Getting the two options confused can prevent you from making an accurate comparison.

For example, the Mercedes-Benz CLA250 is currently listed at $299 for 36 months with $3,794 due at signing. While a $299 lease certainly sounds appealing, the effective cost of this lease is actually $404 when you factor in the amount due at signing. Here, the amount due at signing reflects a down payment of $2,700, a $795 Acquisition Fee, and your first month's payment of $299. As usual, that's all before taxes & fees.

Mercedes-Benz CLA-Class

With $0 down, the payment rises to $375 because the $2,700 is essentially being moved into the monthly payment. Since you're still paying the Acquisition Fee and first month's payment, the lease requires $1,170 at signing. That may seem counterintuitive to the average person if a dealer chooses to advertise a lease as requiring $0 down. Your other option at the moment for the CLA is Sign & Drive from participating dealers.

With Sign & Drive, the same car leases for $397/month with $0 due at signing. While that seems to be $98/month more expensive than the $299 lease above, the effective cost of the Sign & Drive option is lower. If you aren't sure which option is best for you, consider asking your dealer to review your options based on what's important to you. Brands that tend to advertise some of the better Sign & Drive leases include Mazda, Volkswagen, and Subaru.

See this month's top zero-down SUV leases »

, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

Follow On: Twitter

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