How do I convert money factor to APR?

Multiply the money factor by 2400. A money factor of 0.00208 is roughly 5% APR.

Can you negotiate a lease price?

Yes. The selling price is negotiable on a lease just like a purchase, and it directly lowers your payment. The residual and money factor come from the leasing bank.

Should I put money down on a lease?

Usually no. A capitalized cost reduction is not refunded if the vehicle is stolen or totaled, so you lose it. Keep the cash and accept the slightly higher payment.

Lease payment

Lease payment calculator

A lease payment is not a mystery. It is depreciation plus a finance charge, and once you know the selling price, the residual and the money factor you can rebuild any quote yourself in about a minute.

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Lease terms

Every line is required and nothing is pre-filled. Your ZIP sets the sales-tax rate the lease is taxed at.

ZIP code where you'll register

We use it for the local sales-tax rate.

MSRP

Negotiated selling price

Yes, this is negotiable on a lease.

Residual

Money factor

Multiply by 2,400 to see the APR it stands for.

Term

Rebates / incentives

Down payment (drive-off)

Cash down that reduces the cap cost — the acquisition fee has its own line. Estimate only — trucks, vans and other commercial-plated vehicles pay a CVRA weight fee on top of this, so registration can run higher.

Miles per year

Overage charge

Acquisition fee

The bank fee on a lease. It's on the worksheet — pick 0 if the lender waives it.

Days to first payment

A lease collects the first payment at signing, so the next one is due 30 days later.

Estimated title, license & doc fees: $315

We estimate these off the vehicle price instead of asking — California registration is value-based, so that's about $197 of DMV registration, title and license plus the $85 doc-fee cap and about $33 of electronic filing. They're collected in your due at signing. Estimate only — trucks, vans and other commercial-plated vehicles pay a CVRA weight fee on top of this, so registration can run higher.

Your lease payment shows up here

Pick every line and hit calculate. Nothing is guessed for you, because a lease payment only means something when the residual, money factor and term are the ones on your worksheet.

The three numbers that control everything

Selling price. Yes, you negotiate this on a lease exactly like a purchase. Anyone who tells you otherwise is protecting margin.
Residual value, set as a percentage of MSRP by the leasing bank for your term and mileage. Higher residual means less depreciation to pay for.
Money factor, the lease version of an interest rate. Multiply it by 2400 for an approximate APR — 0.00125 is about 3%.

Mileage is a price, not a limit

Choosing 10,000 miles a year instead of 12,000 lowers the payment because the residual goes up. It also means every mile over the allowance costs you at the end, commonly 15 to 25 cents.

For a Fontana or Victorville commuter running the 15 or the 210 daily, a 10,000-mile lease is usually a trap. Count your real annual mileage from your odometer, then buy the allowance you actually need up front, where it is cheaper than paying overage later.

Sign and drive, honestly

A sign-and-drive lease does not make money appear. Fees and the first payment get capitalized into the lease, so your monthly payment is higher. It is a cash-flow choice, not a discount.

Putting a large amount down on a lease is generally a bad idea. If the car is totaled, that money is gone — it does not come back to you.

What to verify on the contract

The selling price matches what you negotiated.
The money factor is not marked up above the bank's buy rate.
The mileage allowance and overage rate are the ones you agreed to.
Acquisition and disposition fees are stated, and you know which one you pay at the end.

The short version

Negotiate the selling price, check the money factor times 2400 against real rates, and buy the mileage you actually drive. A big down payment on a lease is money at risk.

Common questions

How do I convert money factor to APR?: Multiply the money factor by 2400. A money factor of 0.00208 is roughly 5% APR.
Can you negotiate a lease price?: Yes. The selling price is negotiable on a lease just like a purchase, and it directly lowers your payment. The residual and money factor come from the leasing bank.
Should I put money down on a lease?: Usually no. A capitalized cost reduction is not refunded if the vehicle is stolen or totaled, so you lose it. Keep the cash and accept the slightly higher payment.

What's next?

1Compare this against the dealer's written worksheet
2Check what your current car is worth
3Run the full deal, add-ons included
4Have a Car Dog read it before you sign

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Estimates only. Your actual rate, taxes and fees depend on your credit, lender and where the vehicle is registered. Car Dogs is not a lender or a dealership.