A "capitalized cost reduction" on an auto lease
A)is positively related to your monthly payments.An increase in the capitalized cost reduction will increase the size of your monthly lease payments.
B)may be no more than three times your monthly lease payment
C)is an advanced payment on the lease.
D)is equal to the difference between the actual resale value at the expiration of the lease and the estimated resale value.

Question

Quizplus · Accepted Answer

A capitalized cost reduction is an upfront payment made at the beginning of a lease that reduces the overall cost of the lease. This payment is referred to as a "cap cost reduction" or "cap cost" for short. It is not directly related to your monthly payment, but rather a way to lower the total cost of the lease. The amount of the cap cost reduction is negotiable and can be any amount that you and the leasing company agree upon. However, it is typically no more than one or two monthly lease payments.

A "Capitalized Cost Reduction" on an Auto Lease