Definitions for "base interest rate"
The base interest rate is the minimum required rate of return acceptable to...
same as benchmark interest rate
This represents the interest paid on the usage of the vehicle during a lease. It is the ‘cost' of a lease before factoring in discounts, fees, and penalties and is not directly comparable to the APR for a loan. Lowering the base interest rate is one of the methods manufacturers use to subsidize leases. The phrase ‘money factor' measures the same cost and can be converted into a base interest rate. For example, to convert a money factor of 0.00276 into an approximate base interest rate we would multiply the money factor by 24. The result would be 0.0662 or 6.62%.