What is a cap cost?

Cap cost (capitalized cost)

Cap cost, short for capitalized cost, is the price a car lease is based on. It starts from the car's price, adds any fees rolled in, and subtracts money paid up front. It can be negotiated, just like the price when buying, and a lower cap cost lowers the payment.

Where does this site use it?

• Should I lease or buy my next car?

Related terms

• Residual value
• Money factor

General education, not financial advice.