To convert money factors to interest rates, multiply by 2,400. So 0.00125 x 2,400 would equal an interest rate of 3%. 3. Be sure you're getting the MSRP for the exact package of the car you intend to lease. 2. The money factor. This is the "interest rate" you'll pay during your lease. To convert money factors to First of all, the federal government requires that dealers disclose the interest rate on a loan, but not on a lease. Second, most leasing companies don’t use an interest rate for leases in the first place. Instead, they use something called a “money factor.” So, why does a lease have a “money factor” instead of an interest rate? The way to convert a Money Factor into a comparable Interest Rate is to multiply the money factor by 2400. Therefore a Money Factor of .00250 converts to an interest rate of 6%. Though some believe that leasing interest rates are different than automotive leasing rates, this is not necessarily true. Money factor is essentially a decimal number that needs to be in order to calculate your interest rate. The formula is: Interest Rate = Money Factor x 2400. So if your money factor is .000165, then your interest rate is:.000165 * 2400 = .396 or 3.96%. But neither the money factor or your interest rate is likely to be present on your contract. To convert the money factor to an equivalent annual interest percentage rate (APR), the decimal is always multiplied by 2400. In the example where the money factor is .00225, the math indicates To calculate the interest rate on this lease, we just set up our spreadsheet with the $19,000 loan amount as a positive number, each of the four annual payments (as negatives), and then calculate
15 Mar 2018 As both auto prices and interest rates tick upward, car shoppers might to convert the so-called money factor into a interest rate so you know Money factors on a lease, when converted to APR, should be comparable to, or lower than, average interest rates for financing a purchase. Residual Value. The 13 Nov 2019 The lease factor is not an interest rate, but the two are related. In fact, you can convert a money factor into an annual percentage rate (APR) by 17 Apr 2016 Money Factor (MF). This is the interest rate, but expressed in a different way for a lease. Multiply the MF by 2400 to get the equivalent Annual
Annual Percentage Rate (APR): Also called a finance rate, this is the interest rate on a loan; A low residual/low money factor lease can yield a similar monthly payment during the To convert to an equivalent interest rate, just multiply by 24. 10 Oct 2013 I am interested in finding out the **Interest Rate** on a 60 month . My question is, what is the Formula to convert the Lease Rate Factor into an Interest Rate Percentage & what In this case again, the money factor will be –. 31 Jul 2017 Well, the dealer converts the interest rate into a mysterious decimal number. To convert the money factor back into an interest rate, multiply it by 3 Jul 2018 There are many factors that contribute to your monthly car payment, I would discourage putting any money down when you lease a car But you can convert it into a relevant interest rate by multiplying the decimal by 2400. 20 Aug 2019 Find out what credit score you need to lease a car. The "money factor" or rent charge, which is similar to an interest rate on an auto loan. but you can convert it into an interest rate by multiplying the number by 2,400.
5 Jul 2017 (To convert the “money factor” just multiply it by 2400. For example, a factor of . 00375 is a 9% interest rate). auto dealers If the dealer makes a 3% 24 Jul 2017 To convert a money factor to its equivalent percentage rate, multiply it by Lease rates are often lower than an equivalent loan's interest rates. You can convert a money factor to a standard percentage interest rate just by multiplying by 2,400. This simplifies the math of the money factor itself, which is a complicated calculation that
22 Oct 2015 Calculator that converts lease money factor to interest rate percent, or Money Factor to Interest Rate converter, as it relates to car leasing, The lease rate factor, also known as the money factor, is a component of the interest rate used to determine loan payments. It's a different way of showing the A lease payment is composed of an interest portion (borrowed money) and depreciation (1/2 * 1/12 * 1/100) to convert from an interest rate to a money factor. 22 Jul 2019 (So in our example, the 2.85 money factor actually converts into a 6.84% interest rate!) Why do these two rates exist, when they're so similar? So should your lease be for 24 months or 48 months, you're still going to use the conversion factor of 2400. To change an interest rate back to a money factor, A money factor of .0030 is equivalent to a monthly interest rate of 0.6% and an APR of 7.2%. For a leasing arrangement with an However, not all lease companies use the same conversion factor to convert the money factor to an interest rate. Monthly Payment: The monthly lease payments