Most people are familiar with an interest rate but seem to be confused by a "money factor." An Interest Rate and a Money Factor are very similar! They are just represented differently.
- An Interest Rate is represented as a percentage (like 6.5% interest).
- A Money Factor is represented by a figure behind a decimal point (like .00250)
The way to convert a Money Factor into a comparable Interest Rate is to multiply the money factor by 2400. Therefore a Money Factor of .00250 converts to an interest rate of 6%.
Though some believe that leasing interest rates are different than automotive leasing rates, this is not necessarily true. Most "good" leasing Interest Rates are comparable to new car interest rates and in some cases lower! We will discuss finding the right interest rate in greater detail in Shopping for your Lease.
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