You may have heard the common misconception if you’re planning on keeping the car, finance it because it’s cheaper. This is not always true. For those of you that are shopping for a lease, there are a few benefits that you may not be aware of. With Toyota, multiple security deposits allow customers to save money in more than one way.
How Does It Work?
Multiple Security Deposit (MSD) is a payment paid in advance to protect the leasing company against damage to the car or nonpayment to the lease. MSD aims to lower your monthly payments by lowering your interest rate. Toyota allows customers to give up to 10 security deposits. For every extra security deposit given, 0.15% is taken off the annual interest rate in return, reducing your monthly payment. You will receive your deposit back at the end of your lease term.
In the case of a 48-Month lease on a 2016 Rav4 AWD XLE:
Original Rate = 2.49%
Deposits/$ Total = 10/$5,500
Rate Reduction = 1.5%
New Rate = 0.99%
Payment with $0 Down = $481.97/Month
Payment with 10 Deposits = $447.39/Month
SAVINGS (over term) = $1,659.84
Security Deposit to be returned at lease end = $5,500