base interest rate

base interest rate
The interest paid on the usage of the vehicle during a lease. It is the "cost" of a lease before factoring in discounts, fees, and penalties and is not directly comparable to the APR for a loan. Lowering the base interest rate is one of the methods manufacturers use to subsidize leases. The phrase "money factor" measures the same cost and can be converted into a base interest rate. For example, to convert a money factor of 0.00276 into an approximate base interest rate would multiply the money factor by 24. The result would be 0.0662 or 6.6%.

Dictionary of automotive terms. 2015.

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  • Floating interest rate — A floating interest rate, also known as a variable rate or adjustable rate, refers to any type debt instrument, such as a loan, bond, mortgage, or credit, that does not have a fixed rate of interest over the life of the instrument. Such debt… …   Wikipedia

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