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
- Acquisition fees are typically non-negotiable and must be paid upfront or rolled into monthly payments.
- The amount of the acquisition fee can vary depending on the leasing company and vehicle type.
- It is also known as an 'administration fee' or 'bank fee.'
- The acquisition fee does not cover any part of the vehicle’s usage or wear-and-tear costs.
- 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?
"Acquisition fee" appears in:
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.
