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General Lease Calculator

Calculate monthly lease payments for equipment or vehicles. Supports Money Factor/APR toggle and Capital vs Operating lease estimation.

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About

Leasing allows businesses and individuals to utilize assets without the heavy upfront cost of purchasing. However, lease agreements often obscure the true cost of borrowing behind terms like "Money Factor" or "Rent Charge." This tool provides transparency by breaking down the monthly payment into its two core components: Depreciation (the loss of asset value you pay for) and the Finance Charge (interest). It supports both Money Factor (common in US auto/equipment leasing) and APR (common in EU/Consumer loans), allowing for accurate comparison between financing options.

lease finance money factor equipment lease business

Formulas

The monthly lease payment PMT is the sum of the depreciation charge and the finance charge, plus applicable taxes.

Base Payment = Depreciation + Finance
Depreciation = Cnet − RvalTerm
Finance = (Cnet + Rval) × MF

Where Cnet is the Net Capitalized Cost (Price - Down Payment), Rval is the Residual Value, and MF is the Money Factor. If APR is used: MF = APR ÷ 2400.

Reference Data

Money Factor (MF)Equivalent APR (%)Credit Quality Estimate
0.001253.0%Excellent / Super Prime
0.002004.8%Good / Prime
0.002906.96%Average
0.004009.6%Subprime

Frequently Asked Questions

They are essentially the same metric expressed differently. APR is a percentage (e.g., 5%), while Money Factor is a decimal (e.g., 0.00208). To convert Money Factor to APR, multiply by 2400. To convert APR to Money Factor, divide by 2400.
This often confuses borrowers. In a lease, you are financing the *average* value of the car over the term. The formula (Cap + Resid) * MF is a mathematical shortcut that approximates the interest paid on the declining balance, which is computationally easier than an amortization schedule but yields a nearly identical result.