Money Factor Calculator
Convert between money factor and interest rate for vehicle leasing calculations
Calculate Money Factor
Enter the annual percentage rate (APR) for the lease
Conversion Results
Formula used: Money Factor = Interest Rate ÷ 2,400
Calculation: 0% ÷ 2,400 = 0.000000
Money Factor Reference
Excellent (Low Cost)
Money Factor: 0.00125
Equivalent APR: 3.0%
Great lease deal with low financing cost
Good
Money Factor: 0.00208
Equivalent APR: 5.0%
Reasonable financing cost
Average
Money Factor: 0.00292
Equivalent APR: 7.0%
Market average financing cost
High (Expensive)
Money Factor: 0.00400
Equivalent APR: 9.6%
High financing cost - negotiate
Lease Payment Components
Depreciation
Vehicle value decline over lease term
Largest portion of payment
Finance Charge
Interest cost based on money factor
Money factor determines this cost
Taxes & Fees
Sales tax and acquisition fees
Varies by location and dealer
Lease Negotiation Tips
Always ask for the money factor, not just monthly payment
Compare money factors across different dealers
Money factors below 0.003 (7.2% APR) are generally good
Your credit score directly affects the money factor
Manufacturer promotions can offer lower money factors
Understanding Money Factor in Vehicle Leasing
What is Money Factor?
The money factor, also known as the lease factor or lease fee, is a fractional number used in automotive leasing to determine the finance charges. Unlike an interest rate expressed as a percentage, the money factor is presented in decimal format.
Why is it Important?
- •Determines the interest portion of your lease payment
- •Allows comparison between lease deals
- •Helps negotiate better lease terms
- •Enables informed financial decisions
Conversion Formula
Money Factor = Interest Rate ÷ 2,400
Interest Rate = Money Factor × 2,400
Why 2,400?
The multiplier 2,400 comes from the fact that lease interest is calculated on approximately half the vehicle's value (due to depreciation) over 24 months, then multiplied by 100 to convert to a percentage.
Example: A money factor of 0.00125 equals 3% APR (0.00125 × 2,400 = 3%)
Factors That Influence Money Factor
Credit Score
Higher credit scores typically qualify for lower money factors, reducing your lease cost.
Market Interest Rates
When interest rates rise, money factors generally increase as well, affecting lease costs.
Manufacturer Incentives
Special promotions may offer reduced money factors to encourage leasing specific models.