The down payment on the car you are leasing is called the
A) money factor.
B) capitalized cost.
C) residual value.
D) purchase option.
E) capitalized cost reduction.

Question

Quizplus · Accepted Answer

The down payment on a car lease is called the capitalized cost reduction, which is a payment made upfront to reduce the cost that will be financed over the lease term. This is sometimes also referred to as a "cap cost reduction." Therefore, the best choice is E, capitalized cost reduction.

The Down Payment on the Car You Are Leasing Is