Money Factor Calculator
Convert auto lease money factor to APR (and back). Dealers express lease interest as a tiny decimal — use this calculator to see the actual annual percentage rate you're paying.
Money factor to APR reference
| Money Factor | APR | Tier |
|---|---|---|
| 0.00042 | 1.00% | Excellent (subvented) |
| 0.00100 | 2.40% | Excellent |
| 0.00150 | 3.60% | Good |
| 0.00200 | 4.80% | Average |
| 0.00250 | 6.00% | Average |
| 0.00300 | 7.20% | Poor |
| 0.00400 | 9.60% | Poor |
FAQs
What is money factor?
Money factor is the interest rate on a car lease, expressed as a tiny decimal (e.g., 0.00125) instead of a percentage. Dealers use this format to obscure the actual interest rate from consumers. Convert to APR by multiplying by 2,400. Money factor 0.00125 = 3.00% APR. Money factor 0.00250 = 6.00% APR. Always demand the money factor in writing during lease negotiations.
How do I convert money factor to APR?
APR = money factor × 2,400. Examples: MF 0.00100 = 2.40% APR. MF 0.00150 = 3.60% APR. MF 0.00200 = 4.80% APR. MF 0.00250 = 6.00% APR. The 2,400 multiplier comes from the math: money factor is monthly interest rate / 24, so MF × 24 = monthly rate, × 12 months = annual rate, × 100 = percent. Combined: × 2,400.
What's a good money factor?
Below 0.00100 (2.4% APR) is excellent — usually only available through manufacturer subvented (subsidized) lease programs. 0.00100-0.00200 (2.4%-4.8%) is good for tier 1 credit (720+). 0.00200-0.00300 (4.8%-7.2%) is average. Above 0.00300 (7.2%+) is poor — consider financing instead. Money factor varies based on credit tier, lease length, and current rates.
Is money factor the same as APR?
Yes, just expressed differently. Money factor is a decimal (0.00125), APR is a percentage (3.00%). The math is equivalent — you're paying the same interest cost. Dealers prefer money factor because it sounds smaller, but you should always think in APR terms when comparing to traditional financing.
Can I negotiate the money factor?
Yes — money factor is one of the three main lease negotiation levers (along with sale price and residual value). With strong credit and lease shopping, you can often negotiate 0.0005-0.0010 reduction (saving 1.2-2.4% APR). Always ask for the 'buy rate' (the rate the leasing company offers you) vs. the 'sell rate' (what the dealer is quoting — often marked up).
Is the money factor tax deductible?
Not directly — but if the vehicle is used for business, you can deduct the lease payments (which include the money factor cost) on Schedule C in proportion to business use. The IRS may require you to add back an 'inclusion amount' (a small adjustment) for luxury vehicles.
How do I calculate lease interest paid?
Monthly lease interest = (capitalized cost + residual value) × money factor. For a $40,000 car with $25,000 residual and MF 0.00150: monthly interest = ($40,000 + $25,000) × 0.00150 = $97.50. Over a 36-month lease: ~$3,510 in interest. This is on top of the depreciation portion of your monthly payment.