Acquisition fee

Definition

An acquisition fee is a one-time fee charged by a leasing company to initiate a lease agreement. It covers administrative costs such as credit checks, insurance verification, and contract preparation.

5 Must Know Facts For Your Next Test

1. Acquisition fees are typically non-negotiable and must be paid upfront or rolled into monthly payments.
2. The amount of the acquisition fee can vary depending on the leasing company and vehicle type.
3. It is also known as an 'administration fee' or 'bank fee.'
4. The acquisition fee does not cover any part of the vehicle’s usage or wear-and-tear costs.
5. This fee is separate from other potential fees like security deposits or disposition fees.

Review Questions

• What costs does the acquisition fee cover?
• Is the acquisition fee negotiable in most cases?
• How is the acquisition fee different from other fees associated with leasing a car?

Related terms

Disposition Fee:

A charge required at the end of a lease to cover cleaning, inspection, and selling costs.

Security Deposit: A refundable amount collected at the beginning of a lease to protect against potential damages.

Residual Value: The estimated value of a leased vehicle at the end of the lease term.