What is money factor?+
Money factor is the interest rate for a lease, expressed as a small decimal (e.g., 0.00125). To convert to an approximate APR, multiply by 2,400. A money factor of 0.00125 equals roughly 3% APR. Dealers sometimes quote "lease rate" — ask for the money factor and calculate the APR yourself.
What is residual value?+
Residual value is the predicted value of the vehicle at the end of the lease, expressed as a percentage of MSRP. A higher residual means lower monthly payments because you're financing less depreciation. Residual values are set by the manufacturer's finance arm and are not negotiable, but they vary significantly between models.