Question 1

What is a money factor?

Accepted Answer

Money factor is the lease equivalent of interest rate. Multiply by 2400 to convert to approximate APR. A money factor of 0.00125 equals about 3% APR. Lower is better.

Question 2

What is residual value?

Accepted Answer

Residual is the predicted value of the car at lease end, expressed as a percentage of MSRP. Higher residuals mean lower payments because you're financing less depreciation. Residuals are set by the leasing company.

Question 3

How many miles can I drive on a lease?

Accepted Answer

Standard leases allow 10,000-15,000 miles per year. Excess mileage charges are typically $0.15-0.30 per mile. If you drive more, negotiate higher mileage upfront - it's cheaper than paying overage.

Question 4

Can I negotiate a lease?

Accepted Answer

Yes! Negotiate the cap cost (selling price) just like buying. You can also sometimes negotiate money factor with well-qualified credit. Residuals are fixed by the manufacturer and not negotiable.

Car Lease Calculator - Vehicle Leasing Payment Tool