The term, due at signing or cash due at signing, refers to the total amount of cash that is due at the time a car lease contract is signed.
The amount due at signing can include first month’s lease payment, various official tax and title fees, a down payment (cap cost reduction), sales tax on the down payment, and possibly a security deposit.
A “lease acquisition” fee is also sometimes included. The acquisition fee is always included in a car lease but is not always paid in cash at the time of lease signing.
Cash due at signing, in car leasing, is often confused with a down payment. Remember, a down payment, if any, is only a part of the total amount due at lease inception.
If you only have a particular amount of cash that you can apply to your car lease, ask your dealer to tell you how much of that amount will be applied as a down payment (cap cost reduction) after all other fees and charges have been subtracted.
Let’s look at an example:
- 1st month’s payment – $300 (lease payments are always made in advance, unlike loan payments)
- Security deposit – $300
- Taxes and fees – $200
- Down payment (cap cost reduction) – $1000
Total cash due at lease signing = $1800. Of this amount, only $1000 is used as a down payment (cap cost reduction).
Car lease advertisements and TV commercials may specify the amount due at lease signing, but keep in mind that taxes and other official fees required by your state/county are not included, and must be added to the amount specified.