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)capital cost reduction.

Question

Quizplus · Accepted Answer

The down payment on a car lease is typically referred to as the "capital cost reduction," which is the amount of money the lessee puts down upfront to lower the capitalized cost (i.e. the total cost of the car during the lease term). Other options listed such as money factor, capitalized cost, residual value, and purchase option are all terms that relate to different aspects of leasing, but not specifically the down payment.

The Down Payment on the Car You Are Leasing Is