Enter the monthly lease payment and the vehicle price into the calculator to determine the lease factor. The lease factor is a number that reflects the cost of financing a lease and is used to calculate the monthly lease payment.
Lease Factor Formula
The following formula is used to calculate the lease factor:
LF = (MLP / VP) * 2400
Variables:
- LF is the lease factor
- MLP is the monthly lease payment ($)
- VP is the vehicle price ($)
To calculate the lease factor, divide the monthly lease payment by the vehicle price and then multiply the result by 2400.
What is a Lease Factor?
The lease factor, also known as the money factor, is a decimal number that represents the interest rate on a lease. It is used by leasing companies to calculate the portion of your monthly payment that is attributed to finance charges. The lower the lease factor, the less you will pay in interest over the term of the lease. It is an important number to understand when comparing lease options.
How to Calculate Lease Factor?
The following steps outline how to calculate the Lease Factor.
- First, determine the monthly lease payment (MLP) in dollars.
- Next, determine the vehicle price (VP) in dollars.
- Next, gather the formula from above = LF = (MLP / VP) * 2400.
- Finally, calculate the Lease Factor (LF).
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
monthly lease payment (MLP) = $300
vehicle price (VP) = $30,000
