0 Down or Drive Offs Only

Ask the Hackrs
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1

0 down or drive offs only? What’s your opinion, and why?

Is there a true 0 DAS option, or is 1st payment always required on a lease?

Thank you for your input! :+1:t3:

2

you can have it rolled into your lease, but I wouldn’t- why pay financing charges on drive offs?

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3

I don’t know of a reason to do driveoffs only as opposed to $0 DAS. Lots of people seem to do driveoffs on this forum so I’m also curious

4

I can think of three: (1) An accident totalling the car which you’d be out less overall cash with $0 DAS. (2) Less cost per month if you lease swap (3) I’m drinking wine and forgot but I’ll be sure to update this :grin:

Edit: Remembered (3) On a lease pull ahead, you’re paying less overall per month

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5

Didn’t think about the lease pull ahead scenario… :+1:t3:

6

What if MF is nominal? Ex. .00050

7

If your effective MF is low (mine is under 1%), you roll everything in on a bet that the lease doesn’t make it all the way to disposition. I showed all the math recently, but if my lease ends even 1 payment early (buy out, pull-ahead, or totaled), the bet paid off and I won. If not, I’m out roughly $20 in rent. I had 36 months to otherwise use or invest my upfronts.

I always sign and drive.

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9

Where can I see the math you shared? So you don’t even pay first month?

What if % is a tad over 1, say 1.2%

10

Over most 3 year investment timelines you’ll make more than 1-2% investing that money in an index fund. Take advantage of cheap financing.

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11

I think I understand now. The $20 in rent that you lose is from the additional drive offs you roll into the net cap cost. Ex. $2000 DAS x 1% (MF) = $20. If you exit your lease early you win by skimping out on the monies that were rolled into the total cost of the lease?

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12

Not sure which Audi you’re looking at, but having just done 2 eTron unicorn leases in the last week, even with the max MSDs, MF lowered to 0.00128= 3.1% interest rate.

Why would you want to pay interest on DMV fees, deal fees, documentation fees, acquisition fees?

It’s not 1%, so do your calculations and decide what’s in your best interest.

GL

13

You have to decide if you want to pay interest on the upfront costs, and what the alternatives for your money are. Also as others have noted, the risks/total cost for early termination / totalling are lower with 0 DAS.
On a low interest rate (anything less than 3%) I would do 0 DAS, just first month payment, above 3% I would think a little harder and also think a little harder about leasing the vehicle altogether vs. financing or buying outright.
I think people here don’t do 0 DAS, because dealers and brokers advertise deals with upfront costs separate to advertise a lower monthly payment and get your attention. Once someone likes a deal it takes knowledge / initiative to change the structure.

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14

2020 SQ5 MF buy rate is .00050
You’re right it’s not 1%, its 1.2% :slight_smile:

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15

Personal preference but I believe most would agree to prioritize MSDs over drive offs. I hate seeing posts were someone did 5k in drive offs and no MSDs (if allowed and ignoring if the intent is to transfer the lease at a later date)

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16

What exactly does this mean? Thank you.

17

It’s harder to get someone to take over your lease if you put MSDs down. Most people don’t understand how they work and are hesitant to hand over money at transfer (even though they will get it back at lease end).

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18

Audi Financial does not release original lessor from liability so that would probably deter majority of people from transferring lease IMO.