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| Lease Factor | ||
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The term, lease factor, as used in car leasing, is simlar, though not quite the same, as interest on a loan. Lease factor, sometimes called "money factor" or simply "factor," determines how much you'll pay in finance charges on a lease. The higher the factor, the more you'll pay in finance charges. Therefore, when looking at lease deals, you'll want to look for the lowest lease factor. Lease factor is expressed as a small number, such as .00222. To convert to an equivalent interest rate (APR), simply multiply by 2400. Therefore, in our example, .00222 multiplied by 2400 yields 5.3% as the equivalent APR. When looking at lease deals at a car dealership, ask them about the lease factor. It is not something that is routinely discussed. In fact, it is not even disclosed in most car lease contracts. If you don't ask, you'll never know. If a dealer refuses to discuss this important information with you, find another dealer. For more information, see: The Lease Guide
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