Capitalized Cost

When you are done with negotiating the purchase of a car, the price you agree to pay to own the car is called the capitalized cost. This cost is most often much lower than the manufacturer's suggested retail price, which is sometimes called the sticker price. The capitalized cost should be close to the invoice cost of the car.

There are several things that should reduce the capitalized cost that you pay for a car. First, any down payment you make on the car should bring down the capitalized cost. Also, if you have a trade in, this should lower the capitalized cost. If you use a credit card affiliated with the car manufacturer, this can bring down the capitalized cost of your next car purchase. Make sure that whenever you purchase a new or used car, you are paying a fair capitalized cost, and that no unnecessary fees or charges are added on to the price of the car.

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