Lease Money Factor

Free Lease Money Factor calculator with clear step-by-step results.

About Lease Money Factor

A lease quotes interest as a money factor rather than a rate, and the conversion is fixed: money factor = APR ÷ 2400. A 6.9% APR is therefore 0.00288, and a factor quoted as "2.88" is the same thing scaled by 10,000. The rent charge is unusual in that it is calculated on the capitalized cost plus the residual, not on a declining balance, because you are financing the whole vehicle for the term even though you only pay off the depreciation.

Formulas

Money factor

Money factor = APR ÷ 2400

Rent charge

Monthly rent charge = (capitalized cost + residual value) × money factor

Worked example

With the default values below, Lease Money Factor returns Money Factor of 0.00288. Change any input above and every figure here is recalculated in your browser.

Inputs used

Quoted interest rate (APR)accepts 0–40 %: 6.9 %
Capitalized cost (agreed price)minimum 0 $: 32,000 $
Residual value at lease endminimum 0 $: 19,000 $
Lease termminimum 1 months: 36 months

Results

Money Factor: 0.00288
Monthly Rent Charge (Interest): $146.63
Total Rent Charge Over the Term: $5,278.50
Monthly Depreciation Component: $361.11

Step by step

1Values used
2Money factor
3Rent charge
4Money Factor= 0.00288
5Monthly Rent Charge (Interest)= $146.63
6Total Rent Charge Over the Term= $5,278.50
7Monthly Depreciation Component= $361.11

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 5 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Lease structures, fees and disclosure rules vary by lender and jurisdiction, and quoted factors may already include acquisition fees. Review the lease agreement in full and seek independent advice before signing.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Lease structures, fees and disclosure rules vary by lender and jurisdiction, and quoted factors may already include acquisition fees. Review the lease agreement in full and seek independent advice before signing.

Frequently Asked Questions

Why divide by 2400 and not 1200?

The 1200 converts an annual rate to a monthly one; the extra factor of 2 accounts for the rent charge being applied to the sum of the capitalized cost and residual rather than to an average balance. The two conventions cancel to give an equivalent monthly interest cost.

Is a money factor of 0.00288 good?

It equals 6.9% APR. Multiply any quoted factor by 2400 to compare it against loan rates — that is the only reliable way to tell whether a lease is competitively priced.

Why does the residual value increase the interest?

Because the lessor has capital tied up in the whole car for the entire term, not just the part you consume. A high residual lowers your depreciation payment but does not lower the rent charge proportionally.