Do you have to pay a capitalized cost reduction?

At the beginning of a lease, you may have to pay a capitalized cost reduction. It is analogous to a down payment you might make when purchasing a car, except that a capitalized cost reduction payment does not help you build equity (i.e. ownership) in your car.

What is a capitalized cost down payment on a lease?

A capitalized cost down payment on a lease, often referred to as a "cap cost reduction", is the upfront payment you make when initiating a car lease. It's similar to a down payment when buying a car. This amount directly reduces the total cost that you're financing, which in turn lowers your monthly lease payments.

What are the benefits of a capitalized cost reduction (down payment)?

Lower monthly payments: A capitalized cost reduction (down payment), can reduce the total amount being financed, leading to lower monthly lease payments. Improved affordability: Lower monthly payment makes the lease more affordable, especially if you have budget constraints.