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What are the benefits of a one pay lease?
A one pay lease can offer the following advantages:
Less expensive than a traditional lease
Less expensive than paying cash if you like driving newer cars
Easier credit approval
No monthly payments
We?ll expand on each one:
Less expensive than a traditional lease
Two factors make a one pay lease less expensive than a traditional lease.
Less interest ? Because you are making an upfront payment that covers the depreciation of the car over the period of time you?ll drive it, you don?t have to pay interest on this amount. So rather than paying interest on the full cost of the car, you only pay interest on the residual value, or the value of the car at the end of the lease, which is usually about 60% of the MSRP.
Lower interest rate ? Some manufactures (including Audi, Mercedes-Benz, Lexus and Porsche) will discount the interest rate for one pay leases. The savings can be significant?for example a 0.4% interest rate for a one pay instead of 2.8% for a traditional lease.
Less expensive than paying cash if you like driving newer cars
The math is a little more straightforward on a one pay lease vs. a cash purchase. If you paid the same purchase price of $56,500 up front and then sold the vehicle three years later for the residual value of $34,325, it would cost you a total of $22,175+$4,944 (sales tax on the full purchase price, assuming 8.75% tax), or $27,119 in total. Here, a one pay lease saves just under $1,000 (again this ignores the interest you could be earning on that extra money). An additional benefit is that you don?t have to sell the car at the end?simply turn it in.
Easier credit approval
Because you are making the entire payment upfront, most manufacturers will qualify a buyer who wouldn?t ordinarily be approved for a traditional lease. This is an attractive option for clients who have recently relocated to the country, have a limited credit history, or had an event that is impacting their credit. A one pay lease allows these clients to pay less upfront than they would to buy the vehicle outright.
No monthly payments
Some people just don?t like the hassle of another monthly payment. A one pay lease eliminates this while still achieving all the benefits of leasing.
-Matt
A one pay lease can offer the following advantages:
Less expensive than a traditional lease
Less expensive than paying cash if you like driving newer cars
Easier credit approval
No monthly payments
We?ll expand on each one:
Less expensive than a traditional lease
Two factors make a one pay lease less expensive than a traditional lease.
Less interest ? Because you are making an upfront payment that covers the depreciation of the car over the period of time you?ll drive it, you don?t have to pay interest on this amount. So rather than paying interest on the full cost of the car, you only pay interest on the residual value, or the value of the car at the end of the lease, which is usually about 60% of the MSRP.
Lower interest rate ? Some manufactures (including Audi, Mercedes-Benz, Lexus and Porsche) will discount the interest rate for one pay leases. The savings can be significant?for example a 0.4% interest rate for a one pay instead of 2.8% for a traditional lease.
Less expensive than paying cash if you like driving newer cars
The math is a little more straightforward on a one pay lease vs. a cash purchase. If you paid the same purchase price of $56,500 up front and then sold the vehicle three years later for the residual value of $34,325, it would cost you a total of $22,175+$4,944 (sales tax on the full purchase price, assuming 8.75% tax), or $27,119 in total. Here, a one pay lease saves just under $1,000 (again this ignores the interest you could be earning on that extra money). An additional benefit is that you don?t have to sell the car at the end?simply turn it in.
Easier credit approval
Because you are making the entire payment upfront, most manufacturers will qualify a buyer who wouldn?t ordinarily be approved for a traditional lease. This is an attractive option for clients who have recently relocated to the country, have a limited credit history, or had an event that is impacting their credit. A one pay lease allows these clients to pay less upfront than they would to buy the vehicle outright.
No monthly payments
Some people just don?t like the hassle of another monthly payment. A one pay lease eliminates this while still achieving all the benefits of leasing.
-Matt
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