
What is a Money Factor?
During your shopping experience, you might feel overwhelmed by the number of options you have to choose from for purchasing a vehicle. Do you want to pay cash? Would you rather finance? Have you ever considered leasing? The list goes on and on.
One term that you might have come across but aren't clear on how it works is a money factor. A money factor, or sometimes better known as a "lease factor" or "lease fee," is a different method of showcasing the amount of interest charged on a lease with monthly payments.
As you can assume from the name, this method only comes into play when you are considering leasing a vehicle, not with a retail purchase. If you wanted to calculate how a money factor translates into the more common annual percentage rate (APR), you simply need to multiply the designated money factor by 2,400.