New to leasing and wondering what upfront fees you’ll have to pay before you get behind the wheel of your new lease car? In this guide, we’ll explain everything about your car leasing initial rental payment and how it affects the price of your overall lease agreement. We’ll also answer all of your initial payment questions, from how it’s calculated, to when it needs to be paid.
What Does Initial Rental Mean When Leasing A Car?
With leasing, you’ll have to make a payment around the time you receive your new vehicle. This is known as the initial payment or initial rental payment. It’s essentially the first payment you make towards your lease agreement before your monthly payments begin.
What Is An Initial Rental Leasing Payment?
The initial rental payment is a fee that you choose. It’s usually 1, 3, 6, 9 or 12 months upfront towards your lease vehicle. You can choose the payment amount which will then affect the price of your monthly leasing cost.
Although many people think of the initial payment as a deposit, it’s not. Instead, you’re paying towards the overall value of your contract which is why how much you choose to pay affects your monthly contract.
How Is An Initial Payment On A Car Lease Calculated?
The initial payment is based on the total value of your lease contract. All factors including the vehicle, spec, contract length and mileage will determine how much you’ll have to pay.
Once you’ve chosen which car you’d like to lease, you choose whether you’d like your initial payment to be 1-12 months of the value of your vehicle. For example, if you’re looking at a £250 per month car lease with six months upfront, you’ll pay a £1,500 initial payment.
The more you pay upfront, the less you’ll have to pay each month. So depending on your financial situation, you can pay less at the start of your contract if you don’t have the budget to put money down straight away - you’ll then pay slightly higher monthly payments. If you have more money available at the start, you can pay more for lower monthly payments.
How Much Is The Initial Payment On A Car Lease?
As we mentioned above, your initial payment is flexible. You can choose how much you want to pay upfront (between 1-12 months’ worth of your monthly payments). The more you pay, the lower your monthly payments will be.
Is It Better To Pay A Higher Initial Payment?
Whether you pay more at the start of your contract or throughout, you will pay the same amount so it doesn’t matter either way how much you pay upfront. It's down to your personal preference and how much you can afford to pay for your lease.
Can You Choose No Initial Payment Car Leasing?
Vanarama doesn’t offer zero deposit vehicle leasing, however, a one-month initial payment is available as a low-value upfront payment option. For example, with our cheapest lease deals you’ll find affordable models like the Fiat 500, where you could pay around £200 for your initial payment and then the same amount each month for the rest of your lease contract..
Do You Get The Initial Rental Payment Back At The End Of Your Lease?
No, as the initial payment isn’t a deposit and rather contributes towards the cost of your contract, so the money isn’t returned. You are simply paying towards the total value of your overall new car lease.
Can A Higher Initial Payment On A Lease Car Help With Poor Credit?
Paying a higher initial payment for your leased new car may help you take out a lease if you have poor credit. As the finance company takes less of a risk, they’re more likely to accept an agreement, however, each agreement is decided on a case-by-case basis.
When Leasing A Car When Is The First Payment Due?
Your initial payment will be taken by Direct Debit 7 to 10 days after the delivery of your vehicle. Depending on the finance company, this will likely be the first day of your monthly payment.
Does A Maintenance Package Affect My Initial Rental?
In short, yes. As this is an extra cost added to your overall leasing fee, you will pay marginally more each month and on your initial payment. However, you have the peace of mind that servicing, MOTs, breakdowns and other issues are covered for the duration of your contract.
For more leasing on the price of car leasing, head to our how much does a lease car cost guide.
