Money Factor Calculator: Lease Payment & APR Rate 2026

How a money factor works

A car lease payment has two parts. The depreciation fee is the cap cost minus the residual value, divided by the term in months: it pays for the value the car loses while you drive it. The finance charge, also called the rent charge, is the cap cost plus the residual value, times the money factor: it is the cost of borrowing the car’s value. Add the two for the monthly payment. The total lease cost is the payment times the term, the total depreciation is the cap cost minus the residual, and the total finance charges are the monthly finance charge times the term. The money factor is the lease’s interest rate in disguise: multiply it by 2,400 for the equivalent APR, which is the standard approximation dealers and lenders use.

At the defaults — a $35,000 cap cost, a $21,000 residual, a money factor of 0.00250, 36 months — the depreciation fee is ($35,000 − $21,000) ÷ 36 = $388.89, and the finance charge is ($35,000 + $21,000) × 0.00250 = $140.00. The monthly payment is $388.89 + $140.00 = $528.89. The total lease cost is $528.89 × 36 = $19,040.00, of which $14,000.00 is depreciation and $5,040.00 is finance charges. The equivalent APR is 0.00250 × 2400 = 6.00%.

The worked example, line by line

Setup: cap cost $35,000, residual value $21,000, money factor 0.00250, term 36 months.

Line 1 — the depreciation fee. ($35,000 − $21,000) ÷ 36 = $14,000 ÷ 36 = $388.89 a month.

Line 2 — the finance charge. ($35,000 + $21,000) × 0.00250 = $56,000 × 0.00250 = $140.00 a month.

Line 3 — the monthly payment. $388.89 + $140.00 = $528.89 a month (all figures are computed from unrounded values and rounded only for display, so the rounded parts add to the rounded payment here).

Line 4 — the totals. $528.89 × 36 = $19,040.00 over the lease, of which $14,000.00 is depreciation and $5,040.00 is finance charges.

Line 5 — the APR. 0.00250 × 2400 = 6.00%.

Reverse: a 7% APR is a money factor of 0.002917 (exact 0.0029167); for a $450 a month payment the money factor would need to be 0.001091 (exact 0.0010913), the residual would need to be $24,120.88 (exact 24,120.8791), and the cap cost would need to be $32,394.50 (exact 32,394.4954).

Every branch, checked

Cap cost $25,000: the depreciation fee is $111.11 and the finance charge is $115.00, so the payment is $226.11 a month and the total lease cost is $8,140.00. A $10,000 cheaper car cuts the payment by $302.78 a month.

Cap cost $50,000: the depreciation fee is $805.56 and the finance charge is $177.50, so the payment is $983.06 a month and the total lease cost is $35,390.00. A $15,000 dearer car adds $454.17 a month.

Residual $14,000 (40%): the depreciation fee is $583.33 and the finance charge is $122.50, so the payment is $705.83 a month and the total lease cost is $25,410.00. A car that holds less value costs more to lease, because you pay for more depreciation.

Residual $24,500 (70%): the depreciation fee is $291.67 and the finance charge is $148.75, so the payment is $440.42 a month and the total lease cost is $15,855.00. A car that holds its value costs less to lease, even though the finance charge is a little higher.

Money factor 0.00150: the finance charge falls to $84.00, so the payment is $472.89 a month, the total lease cost is $17,024.00, and the APR is 3.60%. A lower money factor is the cheapest way to cut a lease payment without changing the car.

Money factor 0.00350: the finance charge rises to $196.00, so the payment is $584.89 a month, the total lease cost is $21,056.00, and the APR is 8.40%. One thousandth on the money factor is $56.00 a month here.

Term 24 months: the depreciation fee is $583.33, so the payment is $723.33 a month and the total lease cost is $17,360.00. A shorter lease costs more a month but less in total.

Term 48 months: the depreciation fee is $291.67, so the payment is $431.67 a month and the total lease cost is $20,720.00. A longer lease costs less a month but more in total.

Term 60 months: the depreciation fee is $233.33, so the payment is $373.33 a month and the total lease cost is $22,400.00. Stretching to 60 months saves $155.56 a month against 36 months, but adds $3,360.00 in total.

Term 12 months: the depreciation fee is $1,166.67, so the payment is $1,306.67 a month and the total lease cost is $15,680.00. A one-year lease is the dearest per month and the cheapest in total.

Reverse — the other way round: a 7% APR is a money factor of 0.002917; for a $450 a month payment the money factor would need to be 0.001091, the residual would need to be $24,120.88, and the cap cost would need to be $32,394.50.

What the defaults assume

The model assumes the monthly payment before tax: it leaves out sales tax, the acquisition fee, the disposition fee, and any down payment or trade-in, which all change what you actually pay. It assumes the money factor stays the same for the whole lease and the residual is fixed at signing. It assumes the equivalent APR is the money factor times 2,400, which is the standard approximation — the true effective rate is a little different, because a lease is not a loan. With a money factor of 0 the finance charge is $0.00 and the payment is $388.89, the depreciation alone. With the residual equal to the cap cost the depreciation is $0.00 and the payment is $175.00 of finance charge alone. With a 1-month term the whole $14,000.00 of depreciation lands in one payment of $14,140.00. With a residual of $0 the payment is $1,059.72 a month. Rounding convention: all figures are computed from unrounded values, rounded only for display — money to cents, APR to two decimals, money factor to six decimals.

Output · formula · meaning

Who uses this

• The shopper quoted 0.00250 on a $35,000 car: they learn the payment is $528.89 a month, about 6.00% APR — so they know $388.89 is depreciation and $140.00 is finance charge, and they check the $19,040.00 total before signing.
• The shopper choosing between a $25,000 and a $50,000 car: they learn the cheaper car costs $226.11 a month and the dearer one $983.06 — so they know the $25,000 of price is $756.95 a month, and they check the $8,140.00 and $35,390.00 totals before stretching.
• The shopper who wants a $450 a month payment: they learn the money factor would need to be 0.001091, or the residual $24,120.88, or the cap cost $32,394.50 — so they know which lever to pull, and they check the 0.002917 that a 7% APR means before accepting the dealer’s rate.
• The shopper weighing a 24-month or a 60-month lease: they learn 24 months costs $723.33 a month and $17,360.00 in total, against $373.33 a month and $22,400.00 in total at 60 months — so they know the short lease is dearer per month and cheaper in total, and they check the $140.00 finance charge that never changes with the term.

Accuracy & limitations

The math is exact for the numbers you enter: the depreciation fee is the cap cost minus the residual divided by the term, the finance charge is the cap cost plus the residual times the money factor, and the APR is the money factor times 2,400, which is the standard approximation. What the model cannot do is know your real lease: check the cap cost, because dealers add fees and extras to it, and check the residual, because it is set by the lender and it drives the payment more than the money factor does. It assumes the payment is before tax and leaves out sales tax, the acquisition fee, the disposition fee, and any down payment or trade-in. It assumes the money factor stays fixed and the residual is fixed at signing. It leaves out excess-mileage charges and wear-and-tear fees at return. For leasing against buying, see lease vs buy a car; for the loan payment on the same car, see auto loan term comparison calculator.