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By A.I. and Dr. David Edward Marcinko MBA MEd CMP™
SPONSOR: http://www.CertifiedMedicalPlanner.org
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What is it?
The so-called money factor (abbreviated as MF on invoices) is a number in a decimal form that dealers use to calculate the APR of a car lease. It’s a major part of your monthly payment and dealers are known to jack up the money factor to pad their profits.
BROKE DOCTORS: https://medicalexecutivepost.com/2025/08/02/doctors-going-broke-and-living-paycheck-to-paycheck/
How it works
Most doctors don’t ask to see it because they’re not aware of it or don’t know how to calculate it. Ask to see the money factor, then multiply it by 2,400.
For example, if the money factor is .00150, you multiply it by 2,400 to get 3.6%. If that’s higher than the prevailing rate, you have room to talk them down.
How to reduce it
So how do you get a good interest rate when you lease a vehicle? The same way you do when borrowing for any other reason, whether it’s buying a home or applying for a personal loan: by having good credit. This may reduce your interest rate because you’ll represent a lower risk to a lender.
A high residual value on the car could also help you get a better interest rate. A higher residual value means you’d have lower monthly payments because there would be less depreciation on the vehicle. Since interest is applied to your monthly payment, a lower monthly payment would equate to reduced interest charges.
MONEY DOCTORS: https://medicalexecutivepost.com/2025/04/08/psychology-a-money-relationship-questionnaire-for-doctors/
Financial implications
The money factor is one of the many numbers you may want to learn about when leasing a car. It’s one of the transactional costs that come with leasing, and allows dealers and finance companies to make a profit on every lease they execute. As a consumer, it’s a smart idea to learn the financial implications of this number and how it’ll affect your overall costs over the course of a multi-year lease.
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If the interest rate is too high, you may need to shop around for a better rate, negotiate with the dealer or lender to lower the money factor, or consider leasing another vehicle that’s more in line with your budget. Either way, make sure you explore all your financial options before taking a car off the lot.
SALARY NEGOTIATIONS: https://medicalexecutivepost.com/2016/08/21/salary-negotiations-skills-for-doctors-hospitalists/
COMMENTS APPRECIATED
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR- http://www.MarcinkoAssociates.com
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Filed under: "Ask-an-Advisor", Accounting, Ask a Doctor, business, CMP Program, economics, Ethics, finance, Risk Management | Tagged: APR, auto depreciation, auto invoice, budgeting, car borrowing costs, car dealerships, car lease, car lot, CASH, CMP, DO, doctors, DPM, finance, finance companies, interest rates, IRS, lease vehicle, MD, MF, money, money factor, personal-finance, physicians, real-estate, residual value, vehicle depreciation | Leave a comment »
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