What is an Initial Payment with Car Leasing?

What does initial payment mean with a car lease?

The initial payment sometimes known as an initial rental, is an upfront cost at the beginning of your car lease. It works in a similar way to a deposit but what you pay comes off the total price of your lease, reducing your monthly instalments.

Unlike a deposit, you don't get this money back at the end of the contract. However, it goes towards paying for the car over the term, helping to reduce your monthly payments.

The initial rental is flexible, and you can choose how much you pay upfront depending on your budget. However, the more you pay, the lower your instalments will be over the term.

What's the difference between initial rental and payment?

The initial rental or initial payment is only paid once at the start of your lease agreement. However, this is a flexible amount, for which you choose the number of monthly instalments to pay upfront.

The payment is a set cost each month thereafter for the term of your agreement.

Is the initial rental a deposit?

An initial rental is not the same as a deposit as it goes to towards paying for your rental agreement and so will not be refunded when the contract comes to an end.

Do you get the initial payment back?

Your initial payment is in respect of your leasing agreement it pays off a portion of the entire amount which is due over the course of your contract. Because this payment is going towards paying for your car you will not get the initial payment back at the end of your leasing agreement.

How much is an initial rental for a car lease?

The size of an initial rental is calculated in multiples of the monthly rental. This will be 1, 3, 6, 9 or 12 times its value, and you can decide which works best for your circumstances. As such, the initial rental will vary depending on the monthly rental of the vehicle and the number of months you choose to pay upfront.

For example, leasing a Nissan Qashqai at £281.76 per month (inc VAT) means a six-month initial payment for this model is £1,690.56*.

However much you choose to pay in an initial rental, you can drive the car of your dreams for less with one of our brilliant offers. Check out our latest car lease deals available now.

*prices are subject to change depending on model/trim level

Can you choose not to pay an initial payment?

All car lease agreements with Leasing Options require an initial payment. However, this is flexible to suit your budget.

If you're looking for the cheapest option, a one-month initial payment keeps this cost down. But, as the first payment comes off the total lease cost, your monthly instalments will be higher as a result.

When do I pay the initial rental?

The first payment is made directly to the finance company. You can choose to make payment in a couple of ways. If you're paying by debit or credit card, most companies will require it to be made before the car is delivered. Once you've paid, you'll be allocated your delivery slot.

Alternatively, you can pay by bank transfer or direct debit. If you choose this option, you can typically pay after the car has been delivered, as this is when the finance company will set up the payment – sometimes up to 10 days after delivery.

This will vary depending on the finance company used for your lease agreement. So, check to confirm when it has to be paid.

Our simple online guide to car leasing lets you learn more about the whole process, from finding car finance to delivery of your brand new vehicle.

Does a higher initial payment help with a poor credit score?

A successful car lease application depends on a number of factors, including your credit score. If you have a lower rating, this may affect your chances of being accepted for a lease car. However, some finance providers offer solutions to those with bad credit.

Paying a larger initial payment may help towards your application if you have a low credit score. Choosing a nine or 12-month first payment lowers the contract amount and instalments after that. The risk is slightly lower for the finance company, which is favourable for your application.

Different finance companies have different criteria. So, it's best to get advice when thinking about leasing options if you have poor credit.

Who do I make the initial payment to?

Your initial payment is made to the finance company, which is acting on your lease agreement. As Leasing Options is a broker, we do not handle your payment.

If you'd like to know more about the leasing process, why not speak to one of our expert account managers, and they will explain all you need to know.

Does a maintenance package affect the price of my initial rental?

Adding a maintenance package to your lease is a handy way to cover the costs of general servicing and repairs over the contract period. This adds a charge to your lease, which is split between the monthly instalments. You will see a slight increase for the initial payment as this factors in your maintenance package.

For more information, please visit our leasing maintenance guide.

What are the benefits of paying a higher initial rental?

There are several benefits of opting for a higher initial payment for your car lease, such as:

Reducing the ongoing monthly amount for your rental

The more you pay upfront, the less you'll pay over the rest of your contract. However, you can choose how many instalments you'd like to pay (between one and 12 months).

Flexible initial cost

The first payment is flexible, so you decide the best option for your budget.

Makes managing your payments easier during the course of your contract

A higher initial payment means lower monthly instalments. This helps you to manage lease payments more effectively over the term.

It could help if you have bad credit

Paying a higher first payment may be favourable to an application if you have poor credit. Agreements are looked at on a case-by-case basis. But, as the remainder of the lease agreement value is less risk, it may help secure a new car.