Quick Answer: What Should The Money Factor Be On A Lease?

Is it better to lease a car for 24 or 36 months?

Conclusions.

24-month leases may offer additional flexibility, but most shoppers will find they cost a lot more money when it comes to monthly payments.

If your priority is monthly affordability and getting more for your money, you’ll probably find a 36-month contract to be a smarter choice..

What is the best month to lease a car?

New models are generally introduced sometime between July and October, though some can be a bit earlier or later. If you lease within a few months of release, you can usually get the best deal. The only situation where timing doesn’t matter is when the automaker offers special lease deals.

Why do dealers want you to lease?

Leasing is just another method of financing, so you’ll actually be leasing through a bank or leasing company. This doesn’t mean a dealer won’t make money off a lease. In fact, most dealers LOVE leasing because it allows them to make more profit than a traditional car purchase.

What is a good money factor?

A lease deal with a money factor of less than . 0017 is a good deal. Anything higher, means less of a good deal.

Can you negotiate the money factor in a lease?

If that is not the case, negotiate on the purchase price—the cap cost—as if you were going to buy the car for cash. Negotiate the interest rate (money factor) on the lease to a level appropriate to current market interest rates.

How do you factor a lease payment?

Take the adjusted capitalized cost and add it to the residual. Multiply that amount by the money factor. The resulting number will be the amount of interest charged per month. This is called the rent charge.

How do you tell if you are getting a good lease deal?

Quickly Figure Out if Your Lease Deal is GoodAny lease that costs less than $125/month per $10,000 worth of vehicle is considered a good lease deal. Anything below $105 per $10K is a fantastic deal.IF (“Real” Monthly Payment / MSRP ) * 10,000 is less than $125, then it’s a good lease deal.The very best lease deals I’ve seen hover around the $100 per $10k mark.

How is money factor calculated?

money factor is calculated by taking the actual bank interest rate of the loan and dividing it by 2400, resulting in a decimal based number. For example a car lease with an 7% loan has a money factor of .

Why you should never put money down on a lease?

A Down Payment Doesn’t Lower the Lease Price If you aren’t required to make a down payment on a lease, you generally shouldn’t. The No. 1 thing to keep in mind is that putting money down on a lease doesn’t lower the overall cost and save you money in a long run like it does with a car loan.

How do I negotiate a lower lease payment?

Five Steps to Getting the Best Deal on a Car LeaseDo your homework. Determine area dealers’ asking prices by using the “build” feature on the manufacturer’s website. … Go to the dealer and negotiate the sale price downward, just as you would when buying a car. … Discover the money factor.

Why do you multiply money factor by 2400?

When a car dealer quotes you a Money Factor, you can always multiply that by 2400 to get a very good feeling about the actual interest rate %. Also, the monthly payment calculated by the Money Factor is always slightly lower than that calculated by the ‘real’ formula.

Is money factor based on credit?

The money factor is directly determined by a customer’s credit score. The higher the credit score, the lower the money factor on a lease, and vice versa.