Every term you'll encounter on a lease or loan, explained without jargon.
The lease equivalent of an interest rate, expressed as a small decimal (e.g. 0.00125). To convert to approximate APR: multiply by 2,400. A money factor of 0.00125 ≈ 3% APR. Dealers sometimes mark this up — ask for the "buy rate."
The estimated worth of the leased car at lease end, expressed as a percentage of MSRP. Higher residual = lower monthly payment because you pay for less depreciation. Set by the manufacturer's finance arm, not negotiable.
The negotiated selling price — the starting number for lease payment calculations. This IS negotiable, the same as a purchase price.
A $300–$500 fee charged when you return a leased car and don't buy it or re-lease from the same brand. Usually waived for brand-loyal customers.
Total cash due at lease signing — includes down payment, first month, acquisition fee, registration, and taxes. Comparing drive-off amounts across deals is more meaningful than comparing monthly payments alone.