What is a money factor?

Money factor

A money factor is how a car lease shows its interest (definition, opens in a new tab) rate: a small decimal like 0.0025. Multiplying it by 2,400 gives the approximate APR (definition, opens in a new tab), which makes it easy to compare with a car loan. It's part of every lease payment, so it's worth asking for by name.

Where does this site use it?

• Should I lease or buy my next car?

Related terms

• APR (annual percentage rate)
• Residual value
• Cap cost (capitalized cost)

General education, not financial advice.