Money factor is not an annual percentage rate. In a lease, the lease company uses the "money factor" — an arbitrary fractional number, such as .0042 — to calculate the lease charge or fee. The monthly payment combines the resulting fee with the depreciation charge (the total value the car loses over the term of the lease divided by the number of monthly payments). To better understand the money factor, multiply it by 2,400 to arrive at a more typical APR; this calculation will be slightly above the equivalent APR that the money factor represents. This percentage is more useful in comparing leases with each other than with loans, however, because it doesn’t account for all fees and only loans build equity. For example, a rate of 9.84% [.0041 x 2,400] on a lease, while lower, is not necessarily a better deal than a 10.4% APR on a loan, all other factors being equal.