One Pay Lease vs Traditional

Are there any reasons not to do a one pay lease vs traditional? With the deal we are looking at it brings the total cost down quite a bit. I just wanted to make sure there are not any gotchas with the one pay. Thanks!

Other than tying up a lot of capital, not particularly.

I mean there are some other factors. You total the car tomorrow? Kinda screwed there - as opposed to a traditional month to month lease where you haven’t lost all that money? Correct me if I’m wrong.

Also I believe you get a lower MF?

You’re wrong. One pay leases are handled differently than cap cost reductions as far as this goes. They typically hold the one pay amount in escrow and draw the monthly out, so you get the balance.

Oh. Well then

Yes, some brands reduce the MF for a one pay. That’s really the only reason to do a one pay.

1 Like

This would be through Lexus on a GX460. MF on the one pay is .00040, I was hoping for .00030

What is the standard mf?

Dealer quoted .00150, I am awaiting a response on Edmunds.

And the mystery I have never been able to figure out is… why does BMW give a bigger MF discount with 7MSD (in other words 7 payments in advance), versus all of them in advance as with a one pay?

Things that make you go hmmmmm?

One pay on lexus should reduce by .001, so they’re either marking up the standard or the one pay is being treated different.

Keep in mind that on lexus, max MSDs will lower the mf by .00072, so you can get most of the savings without tying up as much capital.

1 Like

Does seem a little weird, however, do keep in mind that with MSDs, the money is above and beyond the lease value. Purely speculating, but it may be a case of with a one-pay, your money sits in escrow so it lowers risk but can’t be invested. With an msd, it isn’t covering any of the actual vehicle payments, so maybe they can invest it differently.

1 Like

You may be onto something there. BMWFS is obviously very savvy on these types of things, so there certainly must be a rationale behind their discount structure. To be honest, I have not been able to figure out how they make any money at all considering the usual incentives/rebates/inflated RVs😁

Obviously BMW FS does not allow this, but what would be cool is if the above speculation is true and we could apply MSD and a one pay…kaaaaaaaching