Vehicle EconomicsAPR to Money Factor Converter
Put a loan quote and a lease quote in the same language, so you can actually compare them.
Why this comes up
You're comparing a loan quote against a lease quote, and the lease side is expressed as a money factor, a small decimal like 0.00125 that isn't directly comparable to a percentage APR. Dealers and leasing companies rarely translate one into the other for you, and the two numbers look nothing alike at a glance, which makes it easy to accept a lease's pricing on faith instead of checking it against the loan-rate terms you already understand. This converts a known loan rate into the money-factor equivalent so you can sanity-check a lease quote against it directly, using the same rate language on both sides.
How we calculated this
Money factor is APR divided by 2400, the standard industry approximation used in the other direction as well (money factor times 2400 recovers the APR). The 2400 constant comes from expressing a simple-interest-style monthly rate as a decimal rather than a percentage, and it's baked into how virtually every US lease is quoted, from manufacturer captive-finance arms to independent leasing companies. It's an approximation, not a Regulation M disclosure or a promised lease term, real lease pricing can fold in subvention (a manufacturer-subsidized rate) or dealer markup that this conversion alone won't reveal.
Worked example: a 6% APR converts to a money factor of 0.0025, run the calculator above with your own rate.
What this means
- If a dealer quotes a money factor noticeably higher than what your credit-qualified loan APR converts to, that gap is often dealer reserve, a markup added on top of the base rate the leasing company actually approved, and it is frequently negotiable.
- A money factor lower than your loan-rate conversion can mean a genuine manufacturer-subsidized lease special, common on vehicles the manufacturer wants to move, worth taking at face value once you confirm it against the lease contract.
- Use Money Factor to APR for the reverse conversion when you have a lease quote in hand and want to check it against loan offers instead.
Limitations
This is a standard industry approximation, not a lender or lessor's actual pricing method, and it does not account for any lease-specific fees, acquisition costs, or a captive lender's own rate sheet. Two quotes with the same money factor can still differ in total cost once capitalized cost, residual value, and fees are counted. See Methodology.
Methodology
This engine is built on Vehicle Economics' lease payment and buyout model: cap cost, residual, and money factor split into a depreciation charge and a rent charge. See Methodology for the full detail.