I came up with this quite a few years ago and after doing it succesfully on three of my past vehicles I figured I should share my success. This only works if you intend to lease a vehicle AND plan on giving the dealer (leasing company) a down payment in order to reduce your monthly payment. If neither of these apply, no need to read further.
In 2000 I was looking at a new BMW 540i. Price was about $75,000. With no money down the lease payment over 36 months was about $1200/month. I had $20,000 cash and figured I would give it to the leasing company to reduce my monthly payment to around $800/month (these are not exact numbers, just numbers for sake of math).
$800 sounded reasonable, but then I thought, what if I invested the $20,000 and paid myself instead? A quick call to my financial advisor and I discovered it was possible to invest the $20,000. in a non-registered mutual fund and have the mutual fund company transfer 1/36th of the value of the account every month into the bank account I use from which the leasing company would deduct my monthly lease payments. Coordinating it such that the debit and credit occured on the same day was no problem.
Three big benefits to doing it this way:
First: I get to sit on my money, not the leasing company.
Second: My money gains interest for me (not the leasing company) over the 36 months. Heck! Even if the interest gain was zero over 36 months, I'm still better off.
Third: For me to reduce my $1200/month payment down to $800/month, I would only need to put $14,400 into the non-registered mutual fund not $20,000. Do the math: $400/month x 36 months = $14,400. So I win again by being able to keep $5,600 in my jeans which means more bike stuff!
Now what's really nice about this program is that it works even better if (1) you are looking at a less expensive car and (2) you work in a job where you can write off yoru car payments on taxes. Maximum today is something like $650-$700/month.
If the vehicle you are looking at is say $35,000 and the payment with no money down is $650/month, and you want to reduce your payment because your company only comps you $400/month car allowance, you are better off to pay yourself with your down payment as illustrated above, and maximize your write off on the vehicle at tax time.
The kicker? Well, even though mutual fund performance has been less than stellar over the past years, that $14,400. I originally invested was still not depleted at the end of the 36th month as there was some interest gained. So I win again!
The risk? You need to have the discipline NOT to touch the $14,400. you originally invested. It's non-registered meaning you can cash it out whenever you want.