Lease guide
How to convert a money factor to APR
Multiply the money factor by 2400 to get the equivalent APR. For example, a money factor of 0.00250 is about 6.0% APR, and 0.00150 is about 3.6%. To go the other way, divide the APR by 2400.
Why 2400
The rent charge each month is (cap cost + residual) x money factor. Because that averages the start and end values, the factor that matches a yearly rate is the rate divided by 24, and 2400 turns a percentage into that decimal.
What a marked-up money factor costs
Lenders publish a base money factor for each model and month. Dealers may add to it. A small change in the decimal is a real change in the payment over 36 months, which is why it is worth asking for the base rate.
How to check a quote
Ask for the cap cost, residual, money factor, term and fees in writing. Rebuild the payment from them; if the quote is higher than the math, something else is in it.
Quick answers
Is a money factor the same as an interest rate?
It is the same idea in a different form. 0.00200 x 2400 = 4.8% APR.
Can I ask the dealer for the money factor?
Yes. You are entitled to know the terms of a lease before you sign, and the money factor is one of them.