Why is 2400 the money factor

You cannot know in advance what lease money factor will be used before you lease unless you ask. In fact, money factor is not even disclosed in car lease contracts. If a dealer refuses to disclose this important information to you, find another dealer.

The best scores get the lowest money factor. When you find out what money factor is being used in your lease you can convert it to interest rate multiply money factor by and compare it to national average auto loan rates from Bankrate.

You should expect to pay about the same rate for your lease. For example, if a dealer tells you his lease Money Factor is. Sometimes a dealer will give you a Money Factor like 3. In this case you just multiply that number by 2. The straight line approximation relies on a small Nr. See the mathematical proof.

Units » Time » Month solar Mean. Units » Time » Month sidereal. Units » Time » Month 30 Days. Amanda Page is a debt expert who specializes in personal finance, mortgages, and loans. Through writing about her debt experience, Amanda became a leader in the financial independence movement. The money factor is the fee a leasing agency charges a consumer to finance a monthly lease payment. The number is used by the agency to determine the rent-charge portion of the monthly payment, which is the portion not depreciated or amortized.

Knowing the ins and outs of the money factor can aid consumers who seek to lease a car or truck on a monthly payment schedule. Although the money factor is similar to the interest paid on loans, it may not appear on a lease agreement.

Unlike an annual percentage rate APR , which is required by law to be disclosed to a consumer obtaining a loan, a leasing agent has no legal obligation to reveal or explain the money factor to the consumer, Francies said.

If the money factor does appear on your lease paperwork, it will often be in decimal form rather than as a percentage. So what should a consumer know about the money factor? A good start is to compare the money factor to interest rates for auto loans. The money factor is calculated with a general formula:. The money factor can be converted into an interest rate by multiplying it by 2, Conversely, if you know the APR, then you can divide it by 2, to arrive at the money factor.

The equation looks like this:. That means the money factor in this case is 0.