I’ve never owned a new car, so I apologize for the dumb question. Ive been reviewing the calculators and signed deals, but I haven’t approached any dealers yet. If I’m browsing cars only on online, how do I figure out what the MF rate is?
As a super supporter you have access to rate finder.
Click on the calculator on top of this page and input vehicle info and ratefinder will give you all the info
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Since you’re a Super Supporter you have access to rv / mf info in the LH calculator once you enter in make, model, lease term, & mileage.
It will give you the base rate however keep in mind all dealers are allowed to mark it up as a source of profit. The way to usually overcome this is ask for a commensurate discount to cover the increased mf.
It’s why most here suggest you make an offer to the dealer first. Either all details or $X DAS / $Y Monthly.
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Thank you! I was thinking it was more like a broadcasted interest rate. I just signed up about a half hour ago, I see now it’s a bit more behind the curtains.
Residual Value is set by the lender. The dealer cannot modify that number. Money Factor is kind of like the interest rate offered when you traditionally finance a car via a dealer. The dealer may get that rate for 5.9% from the bank but offer it to you at 6.9%. The dealer makes a little money on the rate bump. They can also do that on lease money factor. Lender may have a buy rate of “x” then the dealer marks it up a bit to “y” to make additional profit on the deal.
Sometimes a dealer, for whatever reason, would prefer to offer a bigger discount off the sales price of the car with a marked-up Money Factor, vs leasing the car at Buy Rate but offering a bit less discount.
For those interested, consider the case where the money factor changes. What is the required change in the Selling Price so that the base payment, calculated using an initial money factor, remains unchanged when calculated using a new money factor? Below is the formula…
This assumes that individual payment streams are taxed, and that the 1st payment is not capitalized. It can also be used when tax is levied on the sum of the base payments whether tax is capped or not.
Procedure
States that tax payment streams….
- Calculate the base payment using S and Fo as you normally do.
- Compute the contractual payment by multiplying the base payment by 1 + tax rate
- Compute S + ΔS. Use S + ΔS and F1 to compute the base payment.
- Make sure step 3 agrees with the step 1 base payment. This will ensure that ΔS was calculated correctly.
States that tax the sum of the base payments…
- Calculate the base payment using S and Fo as you normally do.
- Compute the sales tax N x t x Pb plus tax on all other taxable fees
- Decide whether all or some portion of the taxes will be capitalized or paid at lease inception
- Compute S + ΔS
- Calculate the contractual payment using S + ΔS and F1
- Make sure the step 5 contractual payment agrees with the contractual payment using S and Fo. This will ensure that ΔS was calculated correctly.
??? Let me know.
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OP - you triggered a doctoral dissertation.
Too funny!
Be careful what you ask 
I took up to differential equations in college because I thought I wanted to be a physicist but am now a banker. (Not consumer lending) this is actually helpful, thank you lol
I did all the differential stuff (diff geometry (really helpful in navigation), diff topology, etc.). Love diff eq’s.
Anyway, thanks for your interest! I knew this would be a difficult sell. Should have done a better job of selling it by providing a palatable example.
The idea is to answer a very simple question. By how much do I need to lower the sell price if the dealer wishes to increase the money factor and vice versa?
I guess it boils down to a dollar allocation issue for the dealership. How much can we allocate to the sales folks and how much can we allocate to the finance guys. Lowering sell price means less dollars for sales. Raising the MF means more dollars for finance. I think that’s how the accounting works.
Maybe some experienced dealership folks will weigh in.
ODE or PDE?
I hated ODE but PDE was ok
Both! Partial Diff Eq’s have wide applicability to engineering mechanics and physics.
That’s out of the ordinary. Couldn’t resist!
Now you are giving me fluids flash backs!
Oh, my goodness! Don’t tell me you hated fluids too! That’s a real gas!
Fluids was the worst course for my BEME. Where did you get yours from?
I did my undergrad work in Aero Engineering at St. Louis University (Parks College) and my grad work in math, physics, and econ at Northwestern. While at Parks, I was quickly paging through a U. of Connecticut grad catalogue and saw economet… I thought to myself, what the hell is economet…? Went to the econ course descriptions and thought I went to heaven… I saw courses in econometrics and mathematical economics and said… okay, I’m all in! And that’s what attracted me to economics.
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