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FINANCE

Cap Cost Floor

The lowest [cap cost](/glossary/cap-cost) the dealer will accept on a lease before walking — internal floor, never quoted.

// Why it matters

The cap cost floor is the lowest cap cost a dealer is willing to sign on a lease deal before they're losing money against invoice, holdback, and dealer cash. Dealers never voluntarily disclose this floor — they negotiate from MSRP downward. Estimate it by working invoice minus holdback (typically 2%) minus dealer cash (varies by program) minus any manufacturer-to-dealer trunk money. On a $50,000 MSRP vehicle, the realistic cap cost floor is often $46,000-$47,500, meaning the dealer has $2,500-$4,000 of room. Knowing this number gives you a credible counter-offer floor in negotiation.

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