How the conversion works
APR % ≈ money factor × 2,400 · money factor ≈ APR % ÷ 2,400
Multiply a money factor by 2,400 to get its roughly equivalent APR; divide an APR by 2,400 to get the money factor. For example, a money factor of 0.00125 works out to about a 3.0% APR, and a 6% APR works out to a money factor of about 0.0025 — illustrative numbers only, not typical rates.
Money factors are usually written as small decimals like 0.00125. If yours is quoted as a whole number instead — such as 1.25 — that's dealer shorthand for 0.00125 (divide by 1,000). If you enter a money factor above 0.05 here, this tool will flag it in case you pasted an interest rate by mistake.
Frequently asked questions
What is a money factor?
It's the lease world's way of writing an interest rate — a small decimal like 0.00125 instead of a percentage. Some dealers quote it as a whole number instead, like 1.25, meaning 0.00125 (divide by 1,000 to get the decimal form).
Why multiply by 2400 to get the APR?
The money factor is used directly in the lease payment formula in a way that already bakes in the averaging between the financed amount and its residual. Multiplying by 2,400 (rather than 1,200, as you might expect from a monthly-to-annual conversion) reverses that averaging to produce the roughly equivalent APR.
What's a good money factor?
Convert it to an APR with this calculator, then compare that number against current new-car loan APRs you can find from your bank or a lender — a competitive lease rate should be in the same range.