Due at signing on a car lease, and what "zero down" really means
Due at signing on a car lease is the total you pay before you drive away: usually the first monthly payment, the lender's acquisition fee, the dealer's document fee, DMV registration and taxes, plus any down payment (called a capitalized cost reduction) and any security deposit. "Zero down" normally means no down payment, not nothing due.
What you pay before you drive away
Zero down is not zero due at signing.
- 1First monthly paymentUsually included. Ask the dealer to confirm, because it changes how you compare offers.
- 2Down payment (capitalized cost reduction)Zero down usually means none. The other lines are still due unless they are rolled into the lease.
- 3Acquisition feeThe lender's fee. Due at signing if you're not rolling it into the lease.
- 4Dealer's document feeCapped in California: $85 for dealers with a DMV private industry partner agreement, $70 for others.
- 5DMV fees and the tire feeDMV registration and license fees, and the California tire fee.
- 6Sales taxOn taxable fees, and on a cap cost reduction if you make one.
Key takeaways
On a lease, a large down payment lowers the monthly payment but saves very little overall, and you can lose it if the car is stolen or totaled early.
What's included in due at signing on a car lease
Federal Regulation M requires the lease to itemize the amount due at signing. Typical lines:
the first monthly payment, with its tax;
any capitalized cost reduction: cash down, rebates applied or net trade-in credit;
the acquisition fee, if you're not rolling it into the lease;
the dealer's document fee (capped in California) and the electronic filing charge;
DMV registration and license fees, and the California tire fee;
sales tax on the cap cost reduction and on taxable fees;
a refundable security deposit, if the lender requires one.
Each fee is explained in car lease fees explained.
What "zero down" and "sign and drive" really mean
Zero down usually means no capitalized cost reduction. You still pay the first payment, fees and taxes at signing unless they're rolled into the lease.
Zero due at signing, or "sign and drive," means those upfront costs are rolled into the monthly payment or covered by a promotion. When they're rolled in, you still pay them, spread over the lease with rent charge added.
Ads have to show the real number. Under Regulation M, a lease ad that states a payment amount, or says no down payment is required, must also show the total due at signing. Look for it in the fine print.
Why a big down payment is risky on a lease
A cap cost reduction doesn't buy you anything you keep. It prepays part of the depreciation, and the only saving is the rent charge you avoid on that money.
Example (made-up round numbers): a $50,000 capitalized cost, a $30,000 residual, 36 months and a money factor of 0.00200. With nothing down, the base payment is $715.56. Put $5,000 down and it drops to $566.67. Over 36 months you pay $5,360 less in payments, so the $5,000 saved you $360 in rent charges. In effect, you lent the lender $5,000 at the lease's own rate of about 4.8% a year and got it back through lower payments. In California you also pay tax on the $5,000 at signing, which roughly offsets the tax you save on the lower payments.
In the same example, suppose the car is totaled in month three. Insurance pays the car's value to the lender, and GAP coverage, if your lease has it, covers some or all of what's still owed. The $5,000 isn't refunded, because a cap cost reduction is nonrefundable once paid. The same applies if you end the lease early. See GAP and insurance on a leased car.
If you want a lower payment, a lower price or a lower money factor is the better lever; see capitalized cost and money factor. If you have cash to spare, keep it, or ask the lender whether it offers a one-pay lease or refundable security deposits.
Why a big down payment is risky
$5,000 down saved $360. And you can lose it.
$5,000down
The payment drops
With nothing down, the base payment is $715.56. Put $5,000 down and it drops to $566.67.
$360saved
All it saves you
Over 36 months you pay $5,360 less in payments, so the $5,000 saved you $360 in rent charges.
Lostif totaled
It is not refunded
If the car is stolen or totaled early, or you end the lease early, the $5,000 isn't refunded.
How to compare lease offers with different amounts due at signing
Put every offer on the same footing: the total cost over the lease.
Total cost = amount due at signing + (monthly payment times the number of remaining payments)
If the first payment is already in the amount due at signing, count one fewer monthly payment. Divide the total by the number of months for an effective monthly cost.
Example (made-up round numbers), both 36 months with the first payment due at signing:
Offer A: $3,000 due at signing and $600 a month. $3,000 plus 35 payments of $600 is $24,000, or $666.67 a month.
Offer B: $1,000 due at signing and $650 a month. $1,000 plus 35 payments of $650 is $23,750, or $659.72 a month.
Offer B has the higher payment but costs less. Make sure both offers use the same car, term, mileage and fees, and check what each amount due at signing contains. How to read a lease quote goes through a quote line by line.
Due at signing in California
Tax on money down. California taxes a cash cap cost reduction and trade-in credit applied to a lease as advance rent, so the tax on them is part of your upfront cost. See California sales tax on a car lease.
A capped doc fee. The dealer's document fee can't exceed $85 for dealers with a DMV private industry partner agreement, or $70 for other dealers.
A refund if credit falls through. If the lender doesn't approve your credit, the contract must tell you that you can return the car and get back what you paid, unless the refusal came from an incomplete or incorrect application.
No cooling-off period. There's no cooling-off period on a new-car lease, so money paid at signing isn't refundable just because you change your mind.
Totals in writing. From October 1, 2026, a dealer that quotes you a monthly payment in writing must also show the total you'll pay over the lease and any down payment or trade-in the payment assumes. If it compares payment options, it must say that lower payments often increase the total you pay.
What to ask before you pay anything
What's the total due at signing, and what does each line pay for?
Is the first payment included?
How much of it is a cap cost reduction, and what's the payment with none?
Which fees are rolled into the lease instead?
Does the lease include GAP coverage?
Is any deposit refundable, and under what conditions?
The Check my quote tool helps you review a dealer's numbers.
How 021 helps
021's written quote shows the drive-off amount next to the payment, term, miles, taxes, fees and our fee, before you agree to anything. Nothing hidden. If you have a dealer quote with a different amount due, send it through Beat my deal and we'll beat it or tell you it's already a good deal.
Comparing two offers
Compare the total cost, not the payment.
Offer A
$3,000 due at signing and $600 a month. $3,000 plus 35 payments of $600.
Total cost$24,000, or $666.67 a month
Offer B
$1,000 due at signing and $650 a month. $1,000 plus 35 payments of $650.
Total cost$23,750, or $659.72 a month
Both 36 months, first payment due at signing. Total cost = amount due at signing + monthly payment times the remaining payments. Made-up round numbers.
Common questions
Are zero down leases worth it?
What credit score is needed for a zero down lease?
Should I put money down on a lease?
What does sign and drive mean on a lease?
Is the first month's payment included in due at signing?
Do I get my down payment back if the lease ends early?
021 Auto Leasing is a licensed California autobroker (license #82402). All new cars arranged for sale are subject to price and availability from the selling franchised new car dealer.