I am new to leasing and while I (thought) had read up on all the lingos and terms, I am now confused.
I am trying to get a lease via Pre-negotiated deals via leasehackr for an EV6. The dealer has sent me the term sheet and I noticed that there is $3406 for the line item “Cash Down” and “Total Down”. This amount is the same amount as DAS amount that was specified in the PND, which has $0 down.
I did ask the dealer why this was on the line Cash Down and he did confirm that this will go towards the 1st month payment, taxes & fees but I don’t understand why it’s under Cash Down. He claims that Cash Down = DAS. From everything I’ve read, those two things are not the same.
After much back and forth and me still not understanding why it’s called “Cash Down”, they offered to $0 out the Cash Down and amortize it over 36 months. The math does seem to check out in that the total increase in monthly cost = amount of cash down today.
I’m just so confused as to why this would be on the “Case Down” line item? Am I being unreasonable here? Thanks for your help in advance!
Cash Down and Due At Signing (DAS), from a financial ledger perspective, are the same thing. LeaseHackrs tend to look at them differently since usually DAS is the first month’s lease payment + any MSDs you’re putting into the deal + any fees/taxes that you’re not wanting capitalized into the lease payment.
So, for example, if you wanted to pay your taxes and registration fees up front, that would be in addition to your first month’s lease payment and is owed to the dealer at signing (thus, “Due at Signing”). What you DON’T want to do is put any “cash down” into the lease, thus really only buying down your lease payment. It’s fine to pay for taxes, registration, etc at signing, but nothing beyond that.
I understand down payments and total amounts due at signing differently.
To me, a down payment is a payment against the cap cost/principal directly.
You can do a deal with no down payment but still pay 1st month and fees upfront, anything past that would be a down payment. That’s because 1st month, fees, taxes on rebates, etc are all considered upfront fees unless you capitalize them into a lease.
There are even confirmation of this in some dealer desking tools that let you setup deals this way.
That’s my understanding of it.
I’m sure the math guy will chime in with a diatribe if he sees this thread but I don’t want to tag him.
More importantly, most dealers use these interchangeably, and will refer to the total out of pocket as a down payment.
Steve to answer your question – I’m confused because I don’t know if this matters. It just comes across like I’m paying the “Cash Down” i.e. down payment vs. the fees. The only way that I know that these are going to fees & taxes is, well, because the dealer told me that they were. I’m surprised that there isn’t any other way to represent this on the term sheet that to add it as “Cash Down”.
It’s very reasonable to ask the dealer to present the financials in a way that you’re comfortable with. Something simple that shows the money you are giving them is being put towards the first month’s lease and any fees/taxes you wish to pay up front and not have capitalized/amortized into the lease payment.
A lot of finance people at the dealership and salespeople do not know the difference between Due At Signing and Down Payment. If that is the case here, I wish you good luck in explaining it.
Due at signing is an unambiguous term that specifically means one thing and one thing only; how much is due at signing.
“Cash down” is an ambiguous term that gets used differently by different people. Sometimes it means due at signing, some times it means cap cost reduction, sometimes it means total due other than first month’s payment, etc.
The Lease Calculator defines DAS at first month, upfront fees and upfront taxes. You can roll as much or as little of these costs into the final terms of the deal.
