Generally, no, you do not get your car lease down payment back. This initial payment, often called a capitalized cost reduction, is applied to reduce the total cost of the lease and is used up over the lease term. Think of it as a prepaid expense, similar to paying a full year of rent upfront—you don't get that money back at the end of the year.
However, there is one key exception involving a refundable security deposit. It's crucial to understand the difference between these two upfront costs.
- Down Payment (Cap Cost Reduction): This is money paid to lower the vehicle's capitalized cost, which in turn reduces your monthly payments. This money is spent and non-refundable.
- Security Deposit: This is a separate amount held by the leasing company to cover potential end-of-lease costs like excess wear and tear or mileage fees. If you return the car in good condition and within the mileage limit, this deposit is typically refunded.
You might also get money back if you terminate the lease early and the vehicle's resale value is higher than the remaining lease balance (the "payoff amount"). This scenario, known as having positive equity, is uncommon but possible. The best way to avoid confusion is to carefully review your lease agreement before signing to see exactly what each upfront fee covers.
| Upfront Cost | Typical Amount | Refundable? | Primary Purpose |
|---|
| Down Payment (Cap Cost Reduction) | Varies; often equivalent to a monthly payment | No | Lower the vehicle's lease cost and reduce monthly payments |
| Security Deposit | Usually equal to one monthly payment | Yes, if terms are met | Cover potential excess wear, tear, or mileage fees |
| Acquisition Fee | $500 - $1,000 | No | Administrative cost for initiating the lease |
| First Month's Payment | Varies by lease | No | Payment for the first month of use |
| Title and Registration Fees | Varies by state | No | Legally register the vehicle in your name |
