Negotiating a Lease

Money Factor

The Money Factor is one of the most misunderstood terms in leasing and yet is one of the most important! When dealing with leasing you will most likely come across a different variation of an interest rate called a Money Factor.  The Money Factor is just a simple calculation derived from the interest rate.

As discussed in the "Shopping for your Lease" section, money factors are set by the lending institutions and are not easily negotiated.  However it is important to know that if you are going through a dealer, he may try to sell you a higher money factor than what you should be paying. 

Financial institutions provide dealers with incentives to encourage use of their programs by offering a small percentage of the money factor back to the dealer.   The difference between the money factor your bank charges and the money factor you pay could add up quite significantly.