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| Car Lease Rate | ||
The term, car lease rate, usually refers to the finance rate in a car lease. This rate is called, Money Factor, and is shown as a very small number, such as .00245, which is equivalent to 5.9% APR. Lease rate, or Money Factor, can be converted to interest APR by multiplying Money Factor by 2400. Or, if you have an interest rate and want to convert to Money Factor, simply divide APR interest rate by 2400. This conversion method is not dependent on the number of months in the lease — the conversion factor is always 2400. Car lease rates can vary between lease companies, just as loan and home mortgage rates differ. Smart consumers shop for the best rates. Finance rate is only one part of a lease deal. Make sure you're also getting a good deal on the other factors in your lease such as residual value and lease price. A not-so-good deal can easily have a low lease rate, but a poor residual. Car lease rates can also depend on customers's credit scores. The higher the score, the better the rate. Dealers sometimes are allowed by lease companies to "pad" the lease rate to provide a little extra profit. This is called "reserve" or "buy-rate/sell-rate." For more information, see: The Lease Guide
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