Do you have to pay down an initial payment when leasing a car?

If you choose to lease a car, you must put down an initial payment, also known as a down payment. An initial payment means a non-refundable deposit that you put down at the beginning of your contract to secure your lease.

Historically, the initial payment required for a lease car could either be paid in full or split over 12 monthly installments. This method, however, has been replaced in recent years with a single amount paid upfront. 

This initial payment can be anything from £1,000 to £18,000, depending on the type of vehicle being leased and how much you want to pay per month during your lease period.

In the following sections, we’ll discuss what initial payments for lease cars means, what they are, how they are calculated, and when you must pay them.

What is initial payment on car lease?

Car lease initial payment means the first payment you make on your car lease. Just like with a mortgage on a house, the initial down payment on a car lease is a lump sum you put down at the start of your contract to ensure a lower monthly rate. 

The entire cost of your lease contract remains the same, but a larger down payment will mean you have less to pay out each month for the duration of your lease.

How do dealers calculate the cost of an initial payment on car leasing?

The cost of your car lease initial payment is, to some extent, in your hands. After discussing your budget with the dealership, you can inform them of how much money you wish to put towards the initial payment on a leased car.

This usually impacts your monthly budget and outgoings. If you would prefer to make smaller monthly payments, then you can choose to pay a higher down payment. If you feel you can cope with a higher monthly cost, you could choose to make a lower initial payment.

However, there are some exceptions.

Certain car finance agreements will dictate that you make a specific initial payment, which may be due to their in-house policy, your credit history or your current financial situation.

Is a down payment required when leasing a car?

There are occasionally some no initial payment car leasing deals. But a down payment is almost always required when leasing a car. 

How are initial payments made for a car lease?

Typically, you’ll make the initial payment for your car lease using direct debit, though it may also be possible to use a debit card or bank transfer.

Due to regulations designed to prevent fraud and money laundering, you won’t be able to make a down payment in cash.

When are initial payments made?

When you make your initial payment will depend on the method you use to make it.Down payments made using a debit card will need to be actioned before you can receive your new lease car. However, if you pay by direct debit or a bank transfer, you’ll usually make the initial payment after delivery.

What happens if you have any difficulties with the initial payment?

If you are making a down payment using a debit card and there are not enough funds in your account, delivery for your lease vehicle won’t be booked in.

If, on the other hand, you have chosen to make your initial payment via direct debit or bank transfer and the payments are declined, this will be counted as a late payment and you will have to pay a penalty fee.

What happens to the down payment on a lease?

Initial payments are entirely non-refundable. This means you don’t get them back at the end of your lease. 

Down payments are simply a method of reducing your monthly payment rate or offering a guarantee to those you are leasing from – so it will not be returned.


An initial payment is simply the first payment you make for your car lease. The amount you put down for your initial payment is impacted by the amount you wish to pay each month for the duration of your contract – as well as any stipulations from your dealer. You’ll make your initial payment either before or after delivery, depending on your payment method. If you fail to make the initial payment for your car lease, it will be regarded as a late payment – and you could be fined accordingly.

For expert advice on lease agreements, contact our dedicated team today.