Do you pay a security deposit on a car lease?

Usually not. Most mainstream leases stopped requiring a security deposit years ago, so on a typical deal you pay nothing extra for one. When a lease does ask for a deposit, it's normally about one month's payment, and it's refundable — the dealer holds it and gives it back when you return the car in good shape. If a deposit shows up on your paperwork and you weren't expecting it, ask why it's there before you sign.

It's the difference that matters most for your cash. A down payment is money you hand over that you never get back — it just lowers your monthly. A security deposit is refundable: you get it back at lease-end as long as you've kept up the payments and stayed inside the wear-and-mileage limits. Both tie up cash now, but only the deposit comes home to you later. Don't let anyone use the two words as if they mean the same thing.

Sometimes, yes — some carmakers let you put down extra refundable deposits to earn a lower built-in finance charge, which shaves the monthly. Because the money is refundable, it can be a smarter way to lower a payment than a down payment you'd never see again. But it's still cash that's locked up until the car goes back, so it only makes sense if you have money sitting idle. If you'd rather keep your cash free and working, skip it and negotiate the price and rate instead.

Yes, in almost every case. A security deposit is refunded when you return the car, as long as you're current on payments and the car is within its normal wear-and-tear and mileage limits. The dealer or leasing company can subtract for excess wear, over-mileage, or a missed payment, but what's left comes back to you. Keep the car tidy and inside its limits and you should get the full amount returned.

The keep-your-cash move is usually $0 down and no optional deposit: leave your money in your pocket where it can grow, and lower your payment by negotiating the car's price and earning a good rate with your credit. A refundable deposit is far better than a non-refundable down payment if you're going to tie up cash at all — but the best outcome for most people is not tying it up in the first place. Only choose extra deposits if you have idle money and the payment drop is worth locking it away for a few years.