Lease Money Factor Explained Simply

Lease money factor in the U.S. is the lease equivalent of interest rate—it's a small decimal (e.g., 0.00125) that affects your monthly payment. Here's lease money factor explained simply.

TL;DR Money factor = lease "interest." Multiply by 2,400 to get approximate APR (e.g., 0.00125 × 2,400 = 3%). Lower money factor = lower payment. Ask the dealer for the money factor and compare to buy rate. Use autopremo.com lease calculator and lease vs buy. Use autopremo.com.

What Money Factor Is

Money factor is a decimal (e.g., 0.00100 to 0.00250). It's used in the lease payment formula to add "rent charge" (interest) on the lease. Lower = less interest = lower payment. Use autopremo.com lease calculator to see how it affects payment. Get lease at autopremo.com.

How to Convert to APR

Money factor × 2,400 ≈ APR. Example: 0.00125 × 2,400 = 3% APR. Use that to compare to auto loan rates. Use autopremo.com to compare lease vs buy. See lease vs buy at autopremo.com.

Why It Matters

A marked-up money factor (dealer adds profit) raises your payment. Ask for the buy rate (base money factor) and negotiate if it's marked up. Use autopremo.com so you know what to compare. Check at autopremo.com.

Bottom Line

Lease money factor = lease interest; lower = lower payment. Convert to APR (× 2,400) to compare to loans. Use autopremo.com lease calculator so you see how money factor affects your deal.