Money Factor Calculator - Lease Payment and Rate

A money factor is the lease-industry way of quoting interest. Dealers often print a small decimal such as 0.001875 instead of a 4.5 percent annual rate. The conversion used throughout U.S. auto leasing is Interest rate (%) = Money factor × 2400, or Money factor = Rate / 2400. If you enter an interest rate and leave money factor blank, the calculator converts it. If you enter a money factor, that factor is used even when a rate is also present. Monthly payment follows the standard lease identity: Payment = (Cap cost − Residual) / Term + (Cap cost + Residual) × Money factor. The first term is depreciation spread over the lease months. The second term is the rent charge on the sum of capitalized cost and residual. Capitalized cost is the negotiated price after discounts, plus any amounts rolled in, minus cap-cost reduction from a down payment if you already netted that reduction in the figure you enter. This page also lets you keep down payment and fees separate and adds them to total lease cost as Payment × Term + Down + Fees. Worked numbers help. A $28,000 cap cost, $16,000 residual, 36 months, and 4.5 percent (money factor 0.001875) produce a $415.83 monthly payment. Total lease cost with a $2,500 down payment and $450 in fees is $17,920.00. Taxes, gap insurance, mileage penalties, and residual-value true-ups are not included. Residual is the contract residual, not your guess of wholesale value at term. Use the calculator to compare a dealer money factor with a buy-rate, to see how a higher residual lowers depreciation, or to test a longer term. A money factor that looks “small” can still be expensive; 0.00375 is about 9 percent. Ask whether the quoted factor already includes mark-up. This estimate is for education and negotiation prep, not a lender’s APR disclosure or a signed lease worksheet.