Interested in leasing? For many people, leasing a vehicle can be a better option. It can be more affordable in the long run for drivers who like to return their vehicle to the dealership, putting money toward a newer car. Before you lease, however, familiarize yourself with these financial terms.

Acquisition Fee

When you go to a bank or other financial institution to process the lease, that process costs the institution a certain amount of money. To cover those costs, the institution will charge you an "acquisition fee," sometimes referred to as a "bank fee." This will range between $500 and $1,000, and it is similar to paying a destination charge when buying a car.

Base Monthly Payment

This is the amount you will pay on a monthly basis before tax is figured into a payment, based on the depreciation of the vehicle and the down payment you put toward the total cost.

Capitalization Cost

This is the amount of money it will cost you, in total, to lease the vehicle. This is often similar to a Manufacturer's Suggested Retail Price, or MSRP, in that you can negotiate with the dealer or lower it through other means, such as incentives or down payments.

Capitalized Cost Reduction

This is the amount you owe on the leased vehicle after you have reduced it through negotiations, incentives, down payments, or other means that you have at your disposal.


The cost of leasing a vehicle is based on its rate of depreciation. Over time, new cars gradually lose their value, which means that a vehicle that was $20,000 at the beginning of a lease might be $12,000 by the end of the lease. When leasing a vehicle, you only need to pay for that $8,000 difference.

Residual Value

This is the predicted value of the vehicle after you are done leasing it. In the example above, it would refer to the $12,000 price tag of the vehicle after you return it to the dealership.

Down Payment

The amount of money that you pay upfront for a vehicle, which reduces the monthly payments.

Interested in leasing your next vehicle or have questions about leasing? The folks at Empire Hyundai can help! Contact us or visit us at 428 Pleasant Street, Fall River, MA 02721 today!


Empire Hyundai Inc.

428 Pleasant Street
Directions Fall River, MA 02721

  • Sales: (508) 730-2829
  • Service: (508) 730-2829
  • Parts: (508) 730-2829

Have Questions About Leasing?


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