Standardize Subsidize Lease For Free

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What Is a Subsidized Lease? Although leasing may seem like borrowing a vehicle for a monthly fee, it actually involves a sale -- from the dealership to the leasing company. When automakers refer to a subsidized lease, they're often talking about subsidizing, or lowering, the sale price to the leasing company.
Negotiate the interest rate (money factor) on the lease to a level appropriate to current market interest rates. Also, when the lease ends you typically have the right to buy the car at the residual value.
A lease deal with a money factor of less than. 0017 is a good deal. Anything higher, means less of a good deal. Of course, the best lease deals are made with a combination of low lease PRICE, high RESIDUAL value, and low MONEY FACTOR.
Low Money Factor But like their APR cousins, the lower the number, the lower interest you pay. To convert interest rates to money factors, divide the interest rate by 2,400. To convert money factors to interest rates, multiply by 2,400.
To figure out the cost per $10,000 worth of vehicle, you simply divide the “real” monthly payment by MSRP, then multiply that by 10,000. This lease deal comes out to $121.57/month per $10,000 worth of vehicle. Since it's under $125, it's considered a good lease deal.
Look closely at the mileage allowance in your lease which is often 12,000 or 15,000 miles per year. If you anticipate driving more than that, negotiate extra mileage upfront. It may be cheaper to pay for more miles now than pay the per-mile fee later.
A lease deal with a money factor of less than. 0017 is a good deal. Anything higher, means less of a good deal. Of course, the best lease deals are made with a combination of low lease PRICE, high RESIDUAL value, and low MONEY FACTOR.
The money factor is a method for determining the financing charges on a lease with monthly payments. The money factor can be translated into the more common annual percentage rate (APR) by multiplying the money factor by 2,400. Money factor is also known as a “lease factor” or a “lease fee.”
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