Negotiating a Lease

How to determine your Money Factor

The easiest way to determine your Money Factor is to take the Money Factor number and multiply it by 2400.  This will equate to a similar Interest Rate like you would see on a loan.  While this is a good approximation of what you will be paying in interest, you need to remember that a money factor works slightly differently because of the structure of a lease.  (For more information about how money factors work, see “Leasing Basics”)

Typically a Money Factor will look something like this: .00250.  If you multiply this Money Factor by 2400 you will get the equivalent interest rate:

.00250 multiplied by 2400 = 6%

OR you can work backward to determine your target Money Factor:

6% (or just the number 6) divided by 2400 = .00250.

If you are uncomfortable with this math on the spot with the dealer, you should consider waiting until you get home to make your final purchase decision.  The dealership environment is a difficult place to make a sound business decision.