iko

That's not what he asked. He wants to know if he puts down the MSDs will he get them back.

marsb007

placing multiple security deposits down reduces the money factor (interest rate). You are essentially giving the bank the money up front for the bank to use, and then receiving it back at the end of the lease...

The only thing you lose is your "opportunity cost"... things which you could have done with that money had you used it yourself... Most commonly, if you would have invested that money yourself, your return on investment.

So if you place 5000 as a multiple security deposit, the alternative would be for you to invest that 5000. If you're lucky, you'll get a 10% return, so you get your 5000 back + 500 = 5500 if you invested on your own. If you place that money down as a security deposit, it will likely shave 1500-3000 off the total payments you'll make for your car over the life of the lease.

You have to run the numbers for your particular MSD to figure out whether it's profitable for you to do so...

Either way, MSDs are the way to go generally over a down payment. As other people mentioned, should your car be a total loss you will lose the down payment (as your insurance just pays whatever is remaining on the bank loan and doesn't give you any of your money back). Security deposits always get returned after the end of the lease...

vinnys coupe

iTrader: (1)

so is it worth for me to take my 1500 dollar down payment and put it to MSD or no??

iko

yes

vinnys coupe

iTrader: (1)

thanks alot iko, i basically got the hang of MSD. Put my 1500 in an MSD. It lowers the payment and i get it back at the end of my lease?

iko

Yep. You'll be saving some bucks each month on your payment and get the deposits back at the end of the lease.

vinnys coupe

iTrader: (1)

k thanks alot iko

vINCe_Inc

but because you'r down payment is taken away / removed, your monthly payment would increase slightly... right ?

vinnys coupe

iTrader: (1)

nope decrease lol.. read the thread very clear, dont jump around.

If so and still dont understand read it agian, it took me a while lol.

just go over it agian. I made it pretty clear i dont think you can explain it any better then iko already did.

iko

you'd have to do the math to totally figure it out. I don't have all the number but...

down payment doesn't lower the rental charge. This is computed by the residual and money factor. So putting a down payment may reduce your monthly payment but it doesn't really reduce the total amount owed.

MSD lowers the money factor. Therefore the monthly payment is reduced. Also, the total amount owed is reduced.

So, in theory I guess you could put a down payment on the car and have a lower monthly payment than with MSD. But you'll still pay the same amount over the course of the lease. With the MSD you'll pay less in total.

https://www.myg37.com/forums/showpos...0&postcount=18