Lease Money Factor Calculator

Multiply the money factor by 2400. For example, a money factor of 0.00125 equals 3% APR, and 0.0025 equals 6% APR. The 2400 multiplier combines 1200 (12 months times 100) with a factor of 2 from the lease rent-charge convention, so the conversion is exact, not an approximation.

Divide the APR percent by 2400. A 3% APR is 3 divided by 2400, which equals 0.00125. A 4.8% APR is 4.8 divided by 2400, which equals 0.002. Switch this calculator to APR to money factor mode and it does the division for you.

The rent charge is the lease equivalent of loan interest. It is calculated monthly as the net cap cost plus the residual value, multiplied by the money factor. With a 31,695 cap cost, a 21,000 residual, and a 0.00125 money factor, the monthly rent charge is (31,695 plus 21,000) times 0.00125, or about 65.87.

Lower is better, since the money factor sets your financing cost. On a well-qualified, manufacturer-subvented lease you might see 0.00050 to 0.00150 (1.2% to 3.6% APR). A money factor above 0.0025 (about 6% APR) is high for a captive lender and is worth questioning. Your exact buy rate depends on credit tier and any current incentives.

A lease charges interest on the average outstanding balance over the term. The starting balance is the cap cost and the ending balance is the residual, so their average is half their sum. The money factor already bakes in a factor of 2 (it is half the per-period rate you would expect), which is why you multiply by the full sum rather than the average. The two factors of 2 cancel and the math comes out correct.

No. It is an estimate to help you compare lease quotes and check a dealer's numbers, not financial or tax advice. Your actual money factor, fees, and taxes come from the lessor and depend on your credit, the vehicle, and current programs. Confirm every figure on the signed lease agreement before you commit.