A security deposit is a cash sum that lessors require at lease inception as a safeguard against nonpayment.

Lessors often require a security deposit of around $500 or the amount of one monthly payment. The lessor enjoys the interest on this amount throughout the term of the lease. In theory, you should get this deposit back at the end of the lease, but the lessor often will keep it as part of any excess wear-and-tear charges that are assessed.

Information for this was taken from the Cars.com’s glossary, written by Joe Wiesenfelder.

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Answered by Joe Bruzek on January 7, 2009 in Glossary | Permalink

Comments

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