What is the buy rate on a car lease?
The buy rate is the base money factor a leasing company (the lender) assigns to you based on your credit. Dealers are allowed to mark this rate up and keep the difference as profit — the marked-up figure is called the 'sell rate.' The gap between them is pure dealer margin baked into your monthly payment.
Why it matters
A markup of even 0.0004 on the money factor (about 1% APR) can add hundreds of dollars over a lease. Because the money factor is a tiny decimal, most shoppers never notice the padding — it hides inside a reasonable-looking monthly payment.
What dealers don't tell you
- They can legally mark the money factor up (often by up to 0.0004) and keep the difference.
- Manufacturer 'lease specials' publish the buy rate — you can look it up.
- Asking for the buy rate in writing usually gets the markup removed.
How to negotiate it
- Ask directly: 'Is this the buy rate or the sell rate?' and request the buy rate in writing.
- Compare the quoted money factor against the manufacturer's published lease rate.
- Convert the money factor to APR (× 2,400) to sanity-check it against loan rates.
Worked example
On a 36-month lease with a $29,000 net cap and $18,000 residual, moving from a 0.00150 sell rate to a 0.00110 buy rate cuts the rent charge from (29,000 + 18,000) × 0.00150 = $70.50/mo to × 0.00110 = $51.70/mo. That's about $19/mo, or ~$677 over the full term — money the markup would have cost you.
"Buy rate: 0.00110. Dealer quoted: 0.00150 — a 0.00040 markup, roughly 0.96% extra APR."
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Explain my car leaseFrequently asked questions
How much can a dealer mark up the money factor?
Most lenders cap the markup at around 0.0004 (roughly 1% APR), but there's no universal limit. The only way to know your true rate is to ask for the buy rate and compare it to the manufacturer's published figure.
How do I find the buy rate?
Check the manufacturer's current lease-special money factor for your credit tier, or ask the finance manager to disclose the buy rate in writing. Credit-union and manufacturer sites often list it.