Money factor to APR converter
A money factor is a monthly rate written as a decimal, and multiplying it by 2400 reads it on the scale of an annual percentage rate.
The calculator
Approximate APR equivalent
6.6%
A money factor of .00275, multiplied by 2400.
$173.25 a month in rent charge
A factor of .00275 is about 6.6% as a rate. Written as a factor, it reads like a rounding error.
White tick: 6.35%, the average new-vehicle loan rate (Experian, Q2 2026), for reference.
Over 36 months, $6,237 in rent charge.
Charged on $63,000: the cap cost plus the residual, not the $40,000 alone. That's what the 2400 builds in.
- Cap cost $40,000
- Residual $23,000
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Representation covers purchases and leases from California dealers.
Your numbers
Enter the factor from the lease worksheet. This returns the approximate APR equivalent.
Written on a worksheet without its leading zero, as .00275.
From your lease worksheet: the adjusted capitalized cost. Without one: the negotiated price plus anything rolled in, less any cap cost reduction. Not your total due at signing, which also covers the first payment, fees and taxes.
From the lease worksheet, in dollars: what the lender says the car is worth at lease end. The rent charge is figured on it; the APR equivalent isn't. A residual given as a percent is that percent of MSRP.
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Every figure
- Money factor
- .00275
- Multiplied by
- 2400
- Approximate APR equivalent
- 6.6%
- Cap cost plus residual
- $63,000.00
- Rent charge each month
- $173.25
Twelve annualizes a monthly rate. The other 200 is there because the rent charge is levied on the sum of the capitalized cost and the residual rather than on a declining balance. On a $40,000.00 cap cost against a $23,000.00 residual, the charge is computed on $63,000.00. Averaged across the term, roughly half of that is outstanding at any moment, which is the factor of two.
A captive lender sets a buy rate and a dealer may add to it. The factor you are quoted is the sum of the two, so converting it tells you the rate you are being offered rather than the rate the lender set. The difference is negotiable, and it is one of the places a lease is negotiated without the word discount appearing anywhere.
How this is calculated
A money factor is a monthly rate written as a decimal. Multiplying by 12 annualizes it. Multiplying by 200 converts the lease convention into a percentage, because the rent charge is levied on the sum of the capitalized cost and the residual rather than on a declining balance. The two together are 2400.
The conversion runs both ways. Factor to rate is the direction most people need, because the factor is the number on the worksheet in front of them. Rate to factor reads a rate you already know as a factor, so a quote can be compared against it. It does not tell you what factor a lender will offer.
A factor of .00275 is 6.6%. Written as a factor it reads as a rounding error, which is the practical reason this page exists.
A worked example
A quoted factor of .00275
- Quoted money factor
- .00275
- Multiply by 2400
- .00275 × 2400
- Approximate APR equivalent
- 6.6%
- On a $40,000 cap cost and a $23,000 residual
- $173.25 a month in rent charge
The rent charge is computed on $63,000, which is the cap cost plus the residual, not on the $40,000 alone.
What this assumes
- The conversion is exact arithmetic. It embeds no published figure and nothing in it ages. An APR equivalent is not a disclosed rate. Federal law requires a lender to disclose an APR on a loan and sets no standard rate for a lease, and the 2400 convention approximates the rate a lease implies.
- The conversion reads the factor you were quoted. It doesn't show whether that factor includes a markup.
- The rent charge is levied on the sum of the adjusted capitalized cost and the residual. That convention is what the constant 2400 encodes.
Where these figures come from
The conversion is arithmetic. The 6.35% reference is Experian's Q2 2026 average rate on new-vehicle loans.
Reviewed by CarOracle, a California-licensed auto dealer with an auto broker’s endorsement, license #43082.
Every figure on this page is an estimate, not a quote. A lender, a dealer and the DMV each set their own, and only a signed contract settles what you pay.
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