Definitions for "money factor"
An interest rate divided by 2400. The money factor is used to calculate the...
A multiplier supplied by the Banks and used to calculate the average monthly interest of a lease payment.
This number is set by the lessor and can vary from company to company. This is how the lessor determines their profit. It is a fractional number, such as .0042, and is used to calculate the lease fee, by multiplying it by the sales price of the vehicle you are leasing. The monthly payment combines the resulting fee with the depreciation charge. Consumers should look for a lower money factor number. While lessors are not required by Regulation M to disclose the money factor, you can still insist on knowing it before entering a lease.