This is also called “net capitalized cost” and is the cap cost minus the cap reduction. This is the number used to determine monthly payments.
This is often referred to as “cap cost” and is the selling price of the car plus any fees. This is something you should negotiate before taking out a lease, as it is used to calculate your monthly lease payments. The lower the capitalized cost, the lower your payments will be.
Capitalized Cost Reduction
Anything used to lower the cap cost, including a down payment, trade-in, or available rebates. It is called “cap reduction.”
This is another term found in lease contracts and represents the interest rate. The money factor is represented by a number like 0.0037. To determine the interest rate, multiply that number of 2,400. So, with a money factor of 0.0037, the interest rate is about 8.88%.
Just like buying a new car, leased cars depreciate, too. The residual value is the amount the car is worth when the lease is over. This value is estimated when you sign your lease.