Quote:
Originally Posted by Surefoot
Actually, the two others in this thread said that the rebate money is used as a credit against the amount due at signing. Applying the rebate to reduce the initial capitalized cost means that it is NOT applied to reduce the amount due at signing. The problem with applying the rebate to reduce the initial capitalized cost is that you then only get the benefit of the percentage of the rebate that corresponds to the depreciation percentage for your lease (i.e., February's residual on a 36 month / 12k mpy lease is 63%, meaning you pay the 37% depreciation over the life of the lease).
This is why I'm focused on this and want to make sure the dealer applies the $1,000 rebate in the proper place.
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Not necessarily - When it is applied as a cap cost reduction it simply reduces the monthly payment/amount financed. You do, in fact get all of that money as a credit just over the course of the lease and not up front. The residual is based off MSRP and does not change. Advantage of this is lower financed amount so you save a bit on interest - disadvantage is more down up front.