Hi everyone,
I don’t think it’s a secret that 1-pay (upfront, pre-paid) leases have always been a good choice since one doesn’t pay for the interest component of one’s monthly payment and in today’s inflationary climate, I’ve seen money factor around %7 so I want to confirm that if any one day, a person should look into a single-pay lease - that day is today, yes?
Thanks
A one-pay lease lowers the money factor component of the lease, it does not completely eliminate interest. For example, when I did a Toyota lease the base mf was .00265 and the one-pay option reduced it to .00165 or .00100 basis point reduction. The benefit will be similar across most captives / lessors.
It can certainly lower your total cost of ownership and the LH calculator will do that for you assuming you have all the variables correct when you enter them in. The LH calculator also has a button to check for one pay so you can see the percentage change on the MF when you go to compare.
No, single- or one-pays are not exceptionally desirable. They are just icing on the cake.
You have to be certain that you found a good lease to begin with and only then would you consider doing MSD or one pay to make it even better. Sometimes MSD is better than one-pay. Sometimes financing incurs a smaller finance charge than a one-pay lease.
@ApexHunt Thank you for that clarification; it lowers it just as you said; it doesn’t eliminate it
This topic was automatically closed 60 days after the last reply. New replies are no longer allowed.