What is an acquisition fee? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators as well as publishing objective and original content. We also allow you to conduct your own research and evaluate information for no cost – so that you can make informed financial decisions. Bankrate has agreements with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that appear on this website are provided by companies that pay us. This compensation could affect how and where products appear on the site, such as, for example, the sequence in which they be listed within the categories of listing in the event that they are not permitted by law for our loan products, such as mortgages and home equity, and other home loan products. But this compensation does have no impact on the content we publish or the reviews that you read on this site. We do not include the entire universe of businesses or financial deals that might be accessible to you. SHARE: Nejron Photo/Shutterstock
2 minutes read. Published February 26, 2022
Writer: Zina Kumok Written by a contributing writer Zina Kumok is a full-time personal finance writer since the year 2015. She’s a three-time nominee for Best Personal Finance Contributor/Freelancer at the Plutus Awards and a two-time speaker at FinCon, the premier financial media conference. Edited by Chelsea Wing Editor: student loans editor Chelsea is with Bankrate since the beginning of 2020. She’s committed to helping students to navigate the steep costs of college , and breaking down the complexities that are associated with student loans. The Bankrate promise
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This compensation could impact how, where and in what order products appear within listing categories and categories, unless it is prohibited by law. This is the case for our mortgage or home equity products, as well as other home lending products. Other factors, like our own rules for our website and whether or not a product is offered in the area you reside in or is within your self-selected credit score range may also influence the manner in which products are featured on this website. We strive to offer a wide range offers, Bankrate does not include details about each credit or financial item or product. A acquisition fee is a cost you pay when you purchase other kinds of vehicles . It could also be referred to as the administration fee, assignment fee or origination fees. The typical fee is about a couple hundred dollars, therefore it is important to include the cost into your budget when shopping for a car to lease. How do you calculate an acquisition fee? In almost all cases, when you apply for a loan, you will have to pay some sort of initial fee or charge back to your lender. This usually is used to fund the process of establishing the loan and also running an credit check on consumers. For leases on cars it is referred to as an acquisition fee . It can also be referred to as a bank fee or administrative fee. The acquisition fee could be charged upfront or rolled into the monthly lease payment. What is the cost of an acquisition fee? A fee for acquisition on an auto lease typically can range from $395 to $895 but may vary depending on the vehicle in question and the leasing company you’re dealing with, according to Edmunds. Typically, the more expensive the car, the higher the acquisition cost. A luxury car usually comes with more expensive acquisition fees than a mid-priced sedan. Contrary to interest rates, an acquisition fee isn’t affected by the borrower’s credit score, income or other personal factors. What can I do to determine if my loan comes with an acquisition cost? The easiest method to figure out whether your lease is subject to an acquisition cost is to ask the lender or the dealer directly. If you already have the documents, go through it through carefully to see if there is any mention of an acquisition fee. Lenders are good in hiding fees in the fine print, and it can be hard to spot. Acquisition fees can also be included in your monthly lease payment. Whether it’s paid upfront or as part of your monthly lease installments legally, lenders are supposed to make clear any fees or extra charges in the event that you inquire. Are acquisition fees negotiable? Like when you purchase automobiles it is recommended to at least try to discuss. The acquisition fee and other lease-related features such as the trade-in value as well as the interest rate and loan duration may be negotiable. If it doesn’t work out, you can always look for a new lease that doesn’t include an acquisition cost. There are usually lease deals provided by both dealers and manufacturers which could offer better alternatives and it’s important to shop around. It’s also important to remember that in the very rare occasions where you are able to bargain a lower purchase price with a lender, they may raise the amount of money you pay in response. Be sure to read the conditions of your lease agreement before signing on. How to pay an acquisition cost If your leasing company charges an acquisition fee, the expense can either be paid upfront or rolled in the overall cost of the loan. If you opt for the second option, the fee will be paid in addition to the principle amount that the loan is financed. This will increase the monthly lease payments and costs you more over the long term due to compound interest. Adding the acquisition fee to the loan will help, however, if you end up having to pay for the car. If you pay the acquisition cost in advance and your car ends up in an accident, you’ll not receive the entire acquisition cost back from your lender. But if you had rolled this acquisition charge into your loan, you’d be able to recover a portion of the cost. The bottom line Acquisition fees are only able to be avoided if they are discovered them before you officially sign the contract. If you try to negotiate the fee with the leasing firm and have no luck, consider finding a new offer. Beware of being pressured into accepting the lease terms. Before signing a lease agreement take a look at several companies and see what kind of . Shopping around is the best way to minimize or avoid the cost of acquisition. Learn more:
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Written by Contributing writer Zina Kumok, who has been a full-time personal financial writer since the year. She’s a three-time nominee for Best Personal Finance Contributor/Freelancer at the Plutus Awards and a two-time speaker at FinCon, the premier financial media conference. Edited by Chelsea Wing Chelsea Wing Editor: student loans editor Chelsea has been working at Bankrate since the beginning of 2020. She is invested in helping students manage the steep costs of college , and simplifying the complex world that are associated with student loans.
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