What “Money factor” means
The money factor is how a lease charges for the use of the leasing company’s money. Instead of an APR, it’s expressed as a decimal. To compare it with a loan rate, multiply by 2,400: a money factor of 0.00180 is roughly 4.3% APR; 0.00250 is roughly 6.0%.
Each month you pay a rent charge equal to (adjusted cap cost + residual value) × money factor. The leasing company sets a base (“buy”) money factor for each credit tier, and dealers are often allowed to mark it up, within limits the leasing company sets.
How it shows up at the dealership
Many dealers quote only the monthly payment. Ask for the money factor in writing. If they refuse, that tells you something. Brand and enthusiast forums often post the current base money factor and residual for each model and region; check before you go.
Worked example · illustrative numbers, not a quote
Base vs marked-up money factor, 36-month lease
| Adjusted cap cost + residual | $38,500 + $24,000 = $62,500 |
| Rent charge at 0.00180 (≈4.3%) | $112.50/mo |
| Rent charge at 0.00250 (≈6.0%) | $156.25/mo |
| Cost of the markup | $43.75/mo · $1,575 over 36 months |
Before tax. Same car, same price, same residual; only the money factor changed.
What to do
- Look up the current base money factor for your model, term and credit tier.
- Ask the dealer for the money factor on the worksheet, and multiply by 2,400.
- If you have top-tier credit, ask for the base rate; some brands let you lower it with security deposits.
What to say
“What money factor is this payment built on? The base for this model is 0.00180 for tier 1 credit this month. I’d like the lease written at base.”
Also called: lease factor, lease rate, MF.