Money factor.
In plain English
The money factor is how interest is expressed on an auto lease. Instead of a percentage rate, it shows up as a small decimal like 0.00125. To convert it into a familiar yearly interest rate (APR), you multiply the money factor by 2,400. A lower money factor means you pay less to finance the lease, and like a loan rate it is often tied to your credit. Dealers do not always volunteer it, so asking for the money factor is how you compare the true cost of one lease against another.
01Why it matters
A money factor that looks tiny can hide a high interest rate, so converting it to an APR lets you see what the lease is really charging you and negotiate.
02The math, step by step
A lease quotes a money factor of 0.00150. Multiply by 2,400 and you get an APR of about 3.6 percent. If a competing dealer offers 0.00250, that is roughly 6 percent, so the first lease is meaningfully cheaper to finance even at the same car price.
03What this is NOT
The money factor is the financing cost (the interest). The residual value is the car's predicted worth at lease-end. Both shape your payment, but they are two separate numbers.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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