Capitalized (cap) costA leasing term that refers to the price of the car. The lower the capitalized cost, the lower the monthly lease payment. The cap cost is negotiable and can be reduced by a cash down payment, trade-in or a manufacturer's rebate; it can be increased by the loan acquisition fee or costs left over from a previous lease.DepreciationAn asset's decline in value over the course of its useful life. Autos depreciate steeply in their first few years, beginning the moment they are driven off the lot. In an auto lease, a charge for depreciation is the chief part of a consumer's monthly payment.Money factorA leasing term that expresses the cost of borrowing. It is similar to the interest rate paid on a conventional car loan, but it is expressed as a difficult-to-understand fraction. To convert the money factor to a recognizable interest rate, multiply it by 24. For example, a money factor of .00345 x 24 = 8.28 percent interest. The money factor is negotiable, and consumers who lease a new car should look for a money factor close to the current interest rate charged for new-car loans.Residual valueThe amount agreed upon to represent the value of the car at the end of a lease. advertisementRelated Links:Auto loan rates: March 26, 2009Saving on insuranceWhere's my car bailout?Related Articles:Vehicle leases going upOld loan not added to newCan't sell leased car