# Cash down vs Single pay

Newer to this forum and wondering what this difference is between cash down and single pay. From my research, most people on here say to not put cash down as you could be out if the vehicle is totaled or stolen but there is plenty of good responses to those getting single pay leases as the MF is better. Thanks!

You risk your money when you get something out of it that justifies that risk.
Putting money down only saves a couple of bucks (you only save the interest on down payment). However, single pay by changing the MF which is applied to average value of the car potentially saves hundreds. Which in these cases will be comparable to the payment. After all it still depends on the probability of you totaling the car. If it is like 30% then even single pay is not a good decision.

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It is nowhere close to that. Itâ€™s a fraction of 1.7%.

From the numbers posted on this forum, the savings from one-pay are well worth the minimal risk.

If 30% is your threshold, then everybody should do it. There is no way the chances of totaling your car is 30% (much, much, much less).

This is even coming from a guy who totaled 2 cars in one day last July.

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Have you tried Powerball?

Thatâ€™s exactly why everybody else should do single pay and you should not.
You know these happen independently so totaling two last year does not mean you are less likely to have another one.

Basiclally if by putting your money at risk you are saving (earning) X percent of that money, the chance of loosing your money (totaling the car) should roughly be less than X for your strategy to work.
For a single pay X is much higher than putting down payment. As you mentioned this makes almost every single pay lease on this forum a wise decision.

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Donâ€™t tell my insurance company

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Sharing some numbers.
Single pay was \$1687
Monthly was \$85*24 = \$2040
Savings in one pay is \$353 which is 17.3% of \$2040

So are you saying this ?
If probability of totaling the car is less than 17% then itâ€™s a wise decision.

What was the MF for monthly vs single pay?

That is correct.
In fact your average gain in the long run is:
353- p* 2040
Were p is probability of totaling the car and as you see when p is less than .173 your average gain is greater than zero.

But, there is a chance you are out money if something happens by saving 1% - 2% interest. Ultimately, a lease is renting a vehicle (in most cases) and for the added insurance of \$10-\$20 / month (just an estimate based on a few deals Iâ€™ve noticed) it doesnâ€™t seem worth it. You can place that money in a savings account and do auto debit payments and earn a little bit of interest on the account to offset the extra MF.

If you want to play the probability game, just insure your vehicle with liability coverage rather than comprehensive and youâ€™ll save a bunch of money too. But, Iâ€™d never recommend anyone doing this!!!

Im pretty sure youâ€™re required to get comprehensive coverage if you are financing/leasing.

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Yes, it is a requirement upfront but insurance can be changed after the fact. Iâ€™m not supporting this idea but rather using it as an example. It would appear than single pay is a risk vs reward situation that people need to decide if they want to take.

a slight variation on this question.
i got a lease where they didnt deduct the \$5000 of rebates from the cap cost. instead, they deducted it from my â€śonepay paymentâ€ť so i owed \$1000 for the whole lease (trax deal) and paid upfront. what does this mean for insurance if the car is totaled. i would be out 1000 (which i would be whether they deducted the rebates from cap cost or not), but what would happen with the other \$5000.

Thatâ€™s not smart - your financial company has the right to check your insurance at any time. They also do not have to ask you, they can just call the provider (which Iâ€™ve known them to do).

I had someone who continually let their coverage lapse so they jacked her payment up \$60 per month to cover the insurance.

Also, that insurance only covered them. She was still on the hook!

Again, I said I donâ€™t recommend it! The financial company has the right to request proof but odds are they wonâ€™t.

I ask this question: is it SMART to pay MF to NOt borrow money? Ultimately, that is what you are doing with a single pay lease. Granted, you are getting a better interest rate BUT you are not borrowing money.

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I know of three instances where they did - within a year.

Iâ€™m pretty sure they have some backend system that notifies them if it lapses.

Dealerships have a similar system for salespeople and their drivers license. Iâ€™ve had people get a ticket @ 8 am and the dealer know about it at 3 pm.

My insurance company threatened to contact the leasing company with a letter if I let my policy lapse due to non-payment. So they definitely get in the loop if you donâ€™t cover the car or keep it covered (and paid-up).

I donâ€™t have a horse in that race

one vs the other.