LeasequotecheckMoney factor to APR
Leases quote interest as a money factor, a small decimal that is hard to compare with a loan rate. Convert it here.
Money factor to APR
APR6.00%
APR to money factor
%
Money factor0.00250
What a markup adds
Extra APR0.96 points
The conversion
APR = money factor × 2,400 and money factor = APR ÷ 2,400. So a money factor of 0.00250 is about 6% APR.
The 2,400 comes from how the rent charge is calculated on the average of the cap cost and the residual, and from converting a monthly figure to a yearly percentage. It is the standard rule of thumb in the US leasing industry.
Dealer markup
The leasing company sets a base (buy) rate for your credit tier. Dealers are often allowed to add to it and keep the difference. A markup of 0.0004 adds about 1 percentage point of APR. Ask for the base rate in writing and check your quote.