Rick's Free Auto Repair Advice

Acquisition fee for auto lease

What is a car lease acquisition fee?

Think of an acquisition fee just like a home loan origination fee or “points,” or a cell phone company’s set-up fee. It covers the leasing company’s cost to set up an internal account for you, run a credit check and initiate the leasing paper work to comply with all the leasing laws in your state. The fee ranges from around $400 to as much as $1,000, depending on the leasing company, the vehicle and the state you live in. The acquisition fee is usually not negotiable, but can be in certain cases (see below). Worse yet, it’s usually not included in those low lease rates you see advertised online and on TV.

An acquisition fee is a charge to set up the lease. In that respect, it’s just like a home loan origination fee or a cell phone company’s set-up fee. It covers the leasing company’s cost to set up an internal account for you, run a credit check, and initiate the leasing paper work to comply with all the leasing laws in your state. An acquisition fee ranges from around $400 to as much as $1,000, depending on the leasing company, the vehicle, and the state you live in. The acquisition fee is usually not negotiable. Worse yet, it’s usually not included in those low lease rates you see advertised online and on TV.

Is an acquisition fee a scam?

Charging an acquisition fee is standard in the leasing industry. So the fee itself isn’t a scam. But how it’s disclosed can be. Dealers sometimes hide the fee cost or boost the price to reflect the kickback they receive from the leasing company — that’s when it starts looking like a scam. If the advertising for the car lease doesn’t list an acquisition fee or the salesperson doesn’t list the fee separate from the other charges during the negotiations, you’re being scammed because you WILL pay the charge. It’ll be folded into your down payment or monthly payment without your knowledge.

Whether the dealer calls it an acquisition fee, bank fee, document fee or administrative fee, it’s all the same and it’s a standard part of every car lease.

When is the fee negotiable?

Some states and leasing companies allow their selling dealers to add a markup to the acquisition fee, while other states outlaw the practice. This is why it’s so important to compare leasing rates from one dealer to another. If the dealer is taking a markup on the fee, they’re usually doubling their cost, so there’s plenty of room for you to negotiate.

How do I pay the acquisition fee?

You can pay the fee up-front with your down payment or have the fee folded into your monthly payments. Just be aware that if you add it to your monthly payments, you’ll be paying interest on that fee.

©, 2016 Rick Muscoplat

Posted on by Rick Muscoplat


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