Capitalized Cost

The capitalized cost (sometimes referred to as the “cap cost”) is the price that the leasing company pays for a vehicle. It is also one figure that is used to compute the monthly lease payment.

In addition to the negotiated price of the vehicle that the lessee agrees to with the dealer, the cap cost also usually includes an acquisition fee to cover certain administrative costs incurred by the leasing company (to cover paperwork, credit report fees, etc.). If the lessee is rolling negative equity into the lease, that negative equity is also added to the capitalized cost.