Using Multiple Security Deposits To Get A Cheaper Lease

By

Automotive Contributor

Cristyn is a member of CarsDirect's Socal-based team of pricing and incentive experts helping uncover must-know insights for car shoppers. A native of Bakersfield, California, Cristyn has a degree in Liberal Arts from Santa Monica College, with over 10 years of experience in the areas of research and data analysis.


, Automotive Contributor - January 21, 2022

In some situations, putting down a security deposit can help enable shoppers to get a cheaper lease on a car. Even better, multiple security deposits can be used strategically to bring down the money factor (interest rate). These refundable security deposits can have some noteworthy benefits if you have a less-than-perfect credit score.

How do security deposits differ from down payments or amount due at signing? An important distinction is that security deposits are usually optional and are refundable or transferable at the end of the lease. They are also paid in addition to a down payment or amount due at signing.

However, it’s worth noting that this strategy may not be available across all brands or in every location, as is the case with New York State, where security deposits on a lease cannot exceed $749. That said, different brands may have different program guidelines. In fact, some brands allow multiple security deposits, with each deposit bringing down the money factor by a predetermined number of points.

Security deposits are generally calculated by base monthly payment (before any money factor reductions) rounded up to the nearest $50. In other words, if a base payment is $309/month and you wanted to reduce the money factor, you could simply pay a security deposit of $350, in some cases. Depending on your credit rating, and if you can afford the upfront cost, it may be a good idea to offer multiple security deposits to shave off a few thousand dollars in interest over the life of the lease.

2022 Nissan Sentra

Nissan's multiple security deposit option to lower monthly payments allows lessees to pay up to a maximum of five security deposits to reduce the money factor by 4 points (0.00004) per deposit, not to drop below a rate of 0.00001 (equivalent to 0.02% APR). However, Nissan requires that to use this option a minimum of two security deposits must be paid, because the rate reduction doesn’t start until after the second security deposit is paid.

Similar to Nissan, INFINITI’s multiple security deposit option, which allows lessees to pay up to a maximum of nine security deposits, also requires that a minimum of two security deposits be remitted to realize the benefit. The money factor is reduced by 10 points (0.00010) per deposit, not to drop below a rate of 0.00001, after the first two security deposits are paid.

BMW's ongoing multiple security deposit program allows lessees to pay up to a maximum of seven security deposits to reduce the money factor by 4 points per deposit, not to drop below a rate of 0.00005 (equivalent to 0.12% APR). Some caveats to be aware of: this program cannot be used in conjunction with regional lease rates, and BMW allows the transfer of existing multiple security deposits prior to closing the current lease account to a new lease account. BMW also doesn’t require at least two security deposits before you can reap the benefits.

The multiple refundable security deposit strategy may not be feasible for a lot of people, but that isn’t to say that there aren’t good lease deals to be had. Every month, most brands typically offer some promotional lease incentives, and we compile that data from around the country and publish the best available deals with insider knowledge of what constitutes the best value for your money.

Explore This Month's Top Lease Deals »

, Automotive Contributor

Cristyn is a member of CarsDirect's Socal-based team of pricing and incentive experts helping uncover must-know insights for car shoppers. A native of Bakersfield, California, Cristyn has a degree in Liberal Arts from Santa Monica College, with over 10 years of experience in the areas of research and data analysis.


Privacy Policy|Do Not Sell My Personal Information|Terms of Use|Cookie Policy|Disclaimer|
COPYRIGHT 1999-2022 MH Sub I, LLC dba CarsDirect.com