Don’t we preach “absolute zero down, zero due at signing”? Yet I see every forum partner broker in the ads section is listing leases structured as 3K down. Why is that, am I missing something?
Because it makes the payment look low and covers all the DMV / Taxes / Fees / Addons (Well not brokers here) and gives them cash immediately, instead of later when the bank pays them.
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Because its high enough to get the payment lower and not so high as 5k to come off as ridiculous
2k is usually good enough to cover minimum driveoffs on most non-luxury vehicles
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Zero down is frequently preached on here, while I’m not sure I’d agree zero DAS is as much. Sure when mf’s were extremely low it might have made slightly more sense, now that in most cases they aren’t so low anymore those cases aren’t nearly as common.
Keep in mind when you do zero DAS, you’re now paying interest & taxes on those fees.
Many times esp lately we’ve seen people take advantage of one pays leases where you write a check upfront for 18-36 months in exchange for a lower cost mostly due to a reduction in the mf. No, it’s not all gone if you total the car. It would be pro rated back to you.
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So I post from a dealership in NY. Our tax rate is 8.625%. If I posted numebers with 0 DAS and someone from NYC wants the deal (8.88%) tax, I would get accused of false advertising. Or lets say a CT dealer posts with a higher selling price but includes tax (6.35%) their deal looks better.
By advertising with tax and dmv due at signing, you can compare deals from different areas and just add your local tax rate.
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Everything is 3k down and 7500 miles so that it looks cheap.
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In states where the payment is taxed: you are potentially paying tax, rent on the (rolled-in) tax, and tax on the rent on the tax.
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No, actually.
I think it’s more, “Don’t let yourself into thinking you got a good deal b/c of a low monthly that’s the by product of a large down payment” and “Make sure you’re looking at effective monthly payments so you can accurately compare deals.”
W/ MFs frequently being so high nowadays, putting some money down is not necessarily a bad idea.
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Also one pays/MSDS are usually a good thing.
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Unless the MF is virtually or actually zero, you’ll never hear me recommend this.
Most consumers havent a clue about what those advertisements are,what they consist of and what ends up being the monthly effective payment.
Can you point to many examples from the last four years?
Why? You can get 5.5% on T bills for your cash. MFs for many programs are below that
Its a starting point. Im sure any broker or dealer would be happy to run a scenario with less drive off. You can also use the rule of thumb $30 per thousand at 36 mo to get the general idea. 
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I use $32 plus tax and feel that’s closer when accounting for rent as well.
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One of the things LH and the community at large really try to impress upon people is to run the numbers for themselves.
Yes T-Bills do pay 5.5 however you stopped the equation right there vs fully analyzing it. By that I mean you failed to for rough number sake say you earned $5000 on T-bills, cool! Did you also subtract your effective tax rate from the $5000? $5000 - 25% = $3750. Maybe you saved $4250 with MSD’s…you’d be $500 ahead with MSD’s. For some people they would rather “make” the $3750 and others would rather lower the cost structure and save $4250.
No one is right or wrong but i do encourage people to do the full equation vs just stopping where it benefits you more. It removes subjectivity and confirmation bias and gives more accurate picture.
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People shop us nationwide, so keeping tax and reg out of the quoted payments just makes sense. I never post with down payments/cap cost reductions personally.
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I think you meant marginal tax rate.
Can’t speak about other brokers, but I personally use $3k driveoff for all my posted deals because I’ve found it’s easier for folks to compare deals. At the very beginning of my monthly deals post, I specifically state “Please note that driveoffs can be structured however you like. Quotes below are for illustration only.”
Also, $3k driveoff usually covers 1st payment, upfront taxes on rebates, dealer fees, reg, and some cap cost reduction to round up to $3k for most cars. On some higher MSRP cars it barely covers driveoffs, but I still keep it at $3k. It doesn’t always make sense to do zero driveoff, especially if the MF is high (you’re paying interest on whatever is rolled into the payments). The BMW iX is probably one of the only cars I would recommend doing zero driveoff on since the MF is virtually zero, especially with MSDs.
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Just to clarify, this is referring to DAS?
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