ImperialStormTrooper

Can anyone tell me how to compute the money factor from the figures on the lease agreement.

Thanks.

dentman

the agreed leasing price, and the residual. Because Im not sure where you are at, the residual is the estimated value predetermined by bank or creditor giving you the lease loan. Thats the most important number because how much you have to pay for the lease is based on residual. Everything else in the middle is like algebra. enter something on one side and it reflets on the other. If you put more money down, the payment goes down and vice-versa, less money down more payment. Leasing has an intangible value that many people cannot comprehend; its a rental. Your using the best part of the car for a short while and when the lease is up, many say you've got nothing to show for it but you do -- thats the intangible -- you've been driving around for X years ina brand new ride. Ultimately leasing is way more expensive than buying but you get to trade up to brand new every 2 or 3 years. Hope this helps.

Potomac-Greg

You are paying for the amount of the car you "use up" during the lease term. You pay every month for the used up portion of the car (original net price minus residual value), <b> multiplied by a money factor </b> which reflects the leasing company's cost of funds plus margin.

Money factor is generally lower than a market interest rate.

All that said, I do not know how to calculate a money factor even if I know all of the parameters.

allroad'Ed now

First, the money factor itself is not disclosed on a lease agreement. But you can calculate if you know a few numbers:
Line 6C- Adjusted Cap cost
Line 6D- Residual Value
Line 6F- Rent Charge
Line 6H- Lease Payments

Line 6F is actually the amount of "interest" you are paying over the term of the lease. Interest is in quotes, because it is not interest in the sense of an APR such as on a traditional installment loan.

Here is the formula:

6F/(6H)(6C+6D)= Money Factor

To convert MF to an approximate APR:

MFx2400

Hope that helps.

Audi Awe

Good Luck<ul><li><a href="http://www.leaseguide.com/calc.htm">http://www.leaseguide.com/calc.htm</a</li></ul>