When considering getting a car on a lease, multiple security deposits are always a big concern for potential car owners. How much will I have to put down? Will I get my money back after the lease? These are all valid questions that need answering before deciding whether multiple security deposits are the right choice for you. In this blog post, we’ll discuss what multiple security deposits are and whether or not they’re a good choice for everyone.
We’ll also provide some tips on how to get your money back once the lease is paid off. So if you’re considering using multiple security deposits to reduce your monthly payments, be sure to read on!
What Are Multiple Security Deposits?
Multiple security deposits (MSD) are the payment that the lessee agrees to pay upfront in exchange for a lower interest rate which typically lowers the monthly payments. MSD acts as collateral for the lease agreement. If the lessee damages the car or defaults on their payments, the lessor can keep the MSD as compensation.
Usually, each security deposit equals one month’s payment rounded off to the nearest $50. Some car brands allow up to 10 multiple security deposits. And all the deposits made upfront are refundable at the end of the lease.
If you don’t have ready money to pay for multiple security deposits, consider buying your car through car buying services which can get you your dream car at an affordable price. That way, you will not hassle so hard to fully pay for the lease.
How Multiple Security Deposits Save Your Money
Let’s say you’re leasing a Toyota 2016 Rav4 AWD XLE, and with every extra security deposit you make 0.15%, it is taken off the annual interest rate in return. Toyota typically gives up to 10 security deposits meaning if you pay all the 10 payments, you’ll be reducing your interest rate by 1.5%. Let’s now calculate how much you could save:
If you had 48-Month lease:
Initial Rate = 2.49%
Deposits and Total payment= 10/$5,500
Rate Reduced to = 1.5%
New Rate = 0.99%
Payment with $0 deposit = $481.97/Month
Payment with 10 deposits = $447.39/Month
Saved amount= $1,659.84
Your security Deposit returned at the end of the lease = $5,500
Are Multiple Security Deposits a Good Choice?
For many people, MSDs are a great way to get a car they might not otherwise be able to afford. Multiple security deposits will lower your interest rate as well as save you a significant amount of money over the life of your lease.
That said, it’s important to remember that an MSD is a binding contract, so make sure you can afford the monthly payments before signing on the dotted line. And the best way to deal with this is by buying your car through a dealer who can help you get the best rate for your lease. This way, when you decide to pay multiple security deposits, you’ll be paying significantly less monthly payments which you will find to be much more affordable to you.
Two Car Lease Strategies That Can Work Alongside Multiple Security Deposits
Apart from making multiple security deposits to lower your monthly payments, you can use the two hacks below to manage how you pay for your car.
Extend Your Lease Month After Month till You’re Ready to Get Your Next Car
If you want to keep your car longer than the original lease term, you can extend your lease month-to-month. This is a great way to avoid making a large down payment on a new car while still enjoying the benefits of owning your current vehicle.
It will also give you room to breathe as you decide on the right car choice. Some manufacturers may offer an extendable period of 3 or 6 months while others may cap you for 12 months. The safe thing about extending your lease is that your monthly payments remain the same.
Customize the Mileage to Suit Your Needs
If you’re not driving as many miles as you thought you would, you can customize your lease agreement to reflect that. This will lower your monthly payments and save you some money in the long run.
Of course, if you end up driving more miles than you originally planned, you can always pay the difference at the end of your lease. It’s important to remember that mileage is one of the most common reasons people incur penalties during a lease agreement. So be sure to keep track of how many miles you drive each month so you don’t go over your allotted limit.
How To Get Your Money Back
Once you’ve paid off your car lease, it’s important to request your security deposit back from the manufacturer. This can be done in several ways, but the most common are calling or mailing a request form.
Be sure to include your full name, address, and account number on the form, and be clear about what you’re requesting (i.e. “I would like my security deposit back”). Once the lender receives your request, they will process it and send you a check for your deposit amount, minus any applicable fees.
Multiple security deposits can be a great way to save money. By making multiple deposits, you can reduce your interest rate and make the monthly payments more affordable. Just be sure to read the terms of your MSD agreement carefully so you know what is expected of you. And remember, it’s important to request your security deposit back once you’ve paid off your loan.
Do You Need to Lease a Car?
If you need a car on a lease, we can help. At Autoswiftly, we can help you find the car of your choice, make a negotiation on your behalf and help you get the best possible lease rates for you. Our team of experts will work with you hand in hand to make the process easy and streamlined.
To learn more about us, or to apply to get the process started, contact us today. Our team is standing by to help you get the car you need when you need it.
Recommended reading: What Does MSRP Stand for?