Car Lease - can you pay it all upfront?

[hyphen]

As per title, if got a business car lease, can I pay the whole term's payments up front?

As I hate budgeting monthly payments, rather just pay it.

[hairy vx220]

You could just set up an account with the whole amount in it with a monthly direct debit.

[hyphen]

True, but I would rather just transfer the money from the business account direct to lease company, and forget about it.

[Dolf Stoppard]

I’d ask the company, but I doubt many people do it. Why hand over money when you could stick it in premium bonds and gradually withdraw it to pay the lease? Plus, let’s say you wanted to hand the car back, the lease company has all of your cash and might then be less accommodating.

[Blue62]

If you’re in a position to do that why not just buy a car outright rather than incurring interest and management charges?

[ZX10R NIN]

Blue62 said:

If you’re in a position to do that why not just buy a car outright rather than incurring interest and management charges?

+1

[iphonedyou]

You take out the lease- so benefit from whatever incentive - then pay it off immediately, thereby avoiding the interest.

[The Rotrex Kid]

iphonedyou said:

You take out the lease- so benefit from whatever incentive - then pay it off immediately, thereby avoiding the interest.

You can’t pay off a lease. You’ve misunderstood the question.

And, OP, I think the answer is no. You could likely opt to put in a much larger upfront payment (depending on the lease company) but there will always be some kind of monthly payment needed. That’s kind of the point of a lease

If your company is cash rich, buy a car, write it down and sell it after 3 years. Talk to your accountant.

[jwilco]

I would also say no. What if the car is written off after a few months? They'd then have to deal with transferring a good deal of that money back to you. I really doubt they'd want to hold that cash themselves, even if it's just because their accountants do not have a simple way to handle it!

[ADJimbo]

I asked this question some time ago to a friend who is a big leasing expert - the answer is a resounding no.

He said that the lease company wanted to ‘hear’ from you monthly to give them comfort you still had their asset. The only way to ‘hear’ from you was via a monthly payment.

[CaptainSlow]

ADJimbo said:

I asked this question some time ago to a friend who is a big leasing expert - the answer is a resounding no.

He said that the lease company wanted to ‘hear’ from you monthly to give them comfort you still had their asset. The only way to ‘hear’ from you was via a monthly payment.

Your friend isn't much of a leasing expert. Annual in advance profiles are common in the public sector.

The reason the lessor may not accept an all in advance profile would be if you expect to benefit from the lower interest charge...the lessor may not which to take the rv risk for such low returns. If you're willing to pay all the rentals that were calculated as monthly installments then no problem.

[CaptainSlow]

jwilco said:

I would also say no. What if the car is written off after a few months? They'd then have to deal with transferring a good deal of that money back to you. I really doubt they'd want to hold that cash themselves, even if it's just because their accountants do not have a simple way to handle it!

Rubbish. In that scenario lessors would prefer to be holding the cash rather than chasing a customer for them. Fortunately the accountants have computers these days.

[jwilco]

CaptainSlow said:

Rubbish. In that scenario lessors would prefer to be holding the cash rather than chasing a customer for them. Fortunately the accountants have computers these days.

I don't understand why you have to be rude about it. Your comment doesn't explain why some lease companies explicitly state you cannot pay off a lump sum up front if the "lessors would prefer to be holding the cash rather than chasing a customer".

Your sarcastic comment on accountants having computers is totally non sensical as well. Computer systems are more likely to restrict what an accountant can do compared with doing it all on paper records. Computer systems have to work in specific flows where pen and paper you can do whatever you like.

Edited by jwilco on Monday 24th August 20:01

[ADJimbo]

CaptainSlow said:

ADJimbo said:

I asked this question some time ago to a friend who is a big leasing expert - the answer is a resounding no.

He said that the lease company wanted to ‘hear’ from you monthly to give them comfort you still had their asset. The only way to ‘hear’ from you was via a monthly payment.

Your friend isn't much of a leasing expert. Annual in advance profiles are common in the public sector.

The reason the lessor may not accept an all in advance profile would be if you expect to benefit from the lower interest charge...the lessor may not which to take the rv risk for such low returns. If you're willing to pay all the rentals that were calculated as monthly installments then no problem.

We’re not talking about the public sector are we? That was not the OP’s original question.

Do you know of any lease companies that will take 100% of the rentals up front from a private? If so, prey tell...

[CaptainSlow]

jwilco said:

CaptainSlow said:

Rubbish. In that scenario lessors would prefer to be holding the cash rather than chasing a customer for them. Fortunately the accountants have computers these days.

I don't understand why you have to be rude about it. Your comment doesn't explain why some lease companies explicitly state you cannot pay off a lump sum up front if the "lessors would prefer to be holding the cash rather than chasing a customer".

Your sarcastic comment on accountants having computers is totally non sensical as well. Computer systems are more likely to restrict what an accountant can do compared with doing it all on paper records. Computer systems have to work in specific flows where pen and paper you can do whatever you like.

Edited by jwilco on Monday 24th August 20:01

Paying off a lump sum and paying all your rentals in one go are not the same thing. A lump sum payment would indicate an accelerated amortisation of the financing which would drive lower interest income for the lessor, this reduction in income wouldn't be desired as I noted above.

Receiving all the rentals in advance would be quite simple for the lessor's AR to manage.

Edited by CaptainSlow on Tuesday 25th August 18:39

[CaptainSlow]

ADJimbo said:

CaptainSlow said:

ADJimbo said:

I asked this question some time ago to a friend who is a big leasing expert - the answer is a resounding no.

He said that the lease company wanted to ‘hear’ from you monthly to give them comfort you still had their asset. The only way to ‘hear’ from you was via a monthly payment.

Your friend isn't much of a leasing expert. Annual in advance profiles are common in the public sector.

The reason the lessor may not accept an all in advance profile would be if you expect to benefit from the lower interest charge...the lessor may not which to take the rv risk for such low returns. If you're willing to pay all the rentals that were calculated as monthly installments then no problem.

We’re not talking about the public sector are we? That was not the OP’s original question.

Do you know of any lease companies that will take 100% of the rentals up front from a private? If so, prey tell...

Setting up a standing payment for the next 36/48 months does not indicate that a lessee "still has the asset".

I don't know which companies would accept all the rentals upfront as it would be a rare ask. If it were more common I'd set my own leasing company up and certainly accept it please.