CalcStack — free, instant, no signup. The interactive calculator loads automatically.
The money factor × 2400 is your APR. They hope you never multiply.
A lease payment is two charges: depreciation (what the car loses while you drive it) and finance (interest on the car's full value, disguised as a "money factor"). This calculator runs the dealer's actual formula — (cap cost − residual) ÷ term + (cap cost + residual) × money factor — and translates the money factor into an APR, so you can compare the lease against a loan on honest terms.
Shoppers sitting in the dealership use it on their phones: the salesperson quotes a payment, and this splits it into depreciation and finance charges with the money factor converted to APR. It is the difference between negotiating a price and accepting a payment.
Depreciation fee = (cap cost − residual) ÷ months; finance fee = (cap cost + residual) × money factor. Example: $28,500 cap cost, 60% residual on a $30,000 MSRP ($18,000), 36 months, 0.0025 money factor → $291.67 + $116.25 = $407.92 pre-tax, about $436.47 with 7% tax. Total finance charges over the lease: $4,185.
Multiply by 2400. A 0.0025 money factor is 6% APR; 0.00375 is 9%. Dealers quote the decimal because it looks tiny — always convert before signing, and compare it against loan rates you qualify for. A marked-up money factor is pure dealer profit and is negotiable.
Generally no. A large down payment (cap cost reduction) lowers the payment but is lost if the car is totaled or stolen shortly after — gap insurance covers the lender, not your down payment. Keep the due-at-signing to first payment, fees, and taxes, and negotiate the cap cost instead.