About the Money Factor Calculator
This money factor calculator converts the tiny decimal a leasing company quotes — such as 0.00125 — into the APR you would recognise from a car loan, and converts an APR back into a money factor. It also shows what that rate costs you: the monthly rent charge (the lease equivalent of interest) and the total paid over the lease.
Dealers often present the money factor without explaining it, and a marked-up factor is one of the easiest ways for a lease to cost more than it should. Converting to APR lets you compare the lease against a loan or against the lender’s published “buy rate”, and the rent-charge figures show exactly how many dollars a better rate would save.
The rule of thumb APR = money factor × 2,400 comes from how lease rent charges are calculated. It is an approximation of the effective rate, but it is the standard conversion used across the US auto-leasing industry.
With the default inputs, the equivalent apr is 3%. Change any value above to recalculate instantly.
How to use the money factor calculator
- 1Choose whether you are converting a money factor to APR or an APR to a money factor.
- 2Enter the money factor from the lease worksheet, or the APR you want to compare.
- 3Add the adjusted cap cost, residual value and term to see the rent charge in dollars.
- 4Compare the APR against auto-loan rates or the lender’s buy rate before you sign.
Formula and method
A lease payment has two main parts. Depreciation is (adjusted cap cost − residual) ÷ term. The rent charge is (adjusted cap cost + residual) × money factor. Adding cap cost and residual and multiplying by the factor is equivalent to charging interest on the average balance, (cap + residual) ÷ 2, at a monthly rate of APR ÷ 12. Solving gives MF = APR ÷ 2,400 when APR is written as a percentage.
The base payment shown excludes sales tax, which in most US states is charged on each monthly payment. Acquisition and disposition fees are only included if you roll them into the cap cost.
- MF
- Money factor (lease rate as a decimal)
- APR
- Equivalent annual percentage rate
- Cap cost
- Adjusted capitalized cost of the vehicle
- Residual
- Projected value at lease end
Worked examples
Money factor 0.00125 on a $35,000 lease
0.00125 × 2,400 = 3.0% APR. The rent charge is ($35,000 + $20,000) × 0.00125 = $68.75 a month, depreciation is ($35,000 − $20,000) ÷ 36 = $416.67, so the base payment is $485.42 and you pay $2,475 in rent charges over three years.
Marked-up factor on a $42,000 SUV
A money factor of 0.0021 equals 5.04% APR. On $66,000 of cap cost plus residual that is $138.60 a month in rent charge, or $4,989.60 over 36 months.
Convert 3.6% APR to a money factor
3.6 ÷ 2,400 = 0.0015. On a 24-month lease with $30,000 cap cost and $18,000 residual, the rent charge is $72 a month and depreciation $500, totalling $1,728 in rent charges.
Frequently asked questions
How do I convert a money factor to APR?+
Multiply the money factor by 2,400. For example, 0.00150 × 2,400 = 3.6% APR. To go the other way, divide the APR by 2,400.
What is a good money factor?+
It depends on market rates and your credit tier. Compare the equivalent APR with current new-car loan rates: a money factor whose APR is well above loan rates for your credit score is likely marked up.
Can dealers mark up the money factor?+
Yes. Lenders set a base “buy rate” and many allow dealers to add a markup. You can ask for the buy rate and negotiate the money factor just as you negotiate the vehicle price.
Why is the formula 2,400 and not 1,200?+
Lease rent charges are calculated on cap cost plus residual, which is twice the average balance. Dividing the monthly rate (APR ÷ 1,200) by 2 to account for that doubling gives APR ÷ 2,400.
Does a down payment reduce the money factor?+
No. A down payment lowers the adjusted cap cost, which reduces both depreciation and the rent charge in dollars, but the money factor itself is set by the lender and your credit.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.