What is an acquisition fee?
A. The acquisition/administrative fee usually covers a variety of administrative and insurance or risk-related costs. These may include the costs of obtaining a credit report, verifying your insurance coverage, checking the accuracy and completeness of the lease documentation, entering the lease in data processing and accounting systems, and purchasing insurance for or reserving funds for residual value losses, gap coverage losses and other lease losses (e.g., some lessee excess wear and tear costs if specified in the lease agreement). It is a charge included in most lease transactions that is either paid up-front or is included in the gross capitalized cost. Without an acquisition fee, lessors have to charge higher rental charges.
The acquisition fee is nothing more than a fee the lease company charges upfront or includes in the financed cost supposedly for expenses incurred in creating and assigning the lease over to a bank that will actually finance it. In reality it is just another profit source for the leasor. An acquisition fee is charged by lease companies, not dealers. Dealers typically do not make a profit on this fee, although some lease companies may “kick back” part of the fee to dealers as a reward for sending them business. Acquisition fees vary among lease companies and are usually higher for more expensive vehicles. Generally, acquisition fees range from about $395 to $995. The fee is typically not negotiable since it is set by the lease company and dealers do not have control of it. In most cases, the fee is simply added to capitalized cost, which is the amount being financed in the lease. It appears in a lease contract as “gross capitalized cost” which includes the cost of the vehicle with the a
The acquisition/administrative fee usually covers a variety of administrative and insurance or risk-related costs. These may include the costs of obtaining a credit report, verifying your insurance coverage, checking the accuracy and completeness of the lease documentation, entering the lease in data processing and accounting systems, and purchasing insurance for or reserving funds for residual value losses, gap coverage losses and other lease losses (e.g., some lessee excess wear and tear costs if specified in the lease agreement). It is a charge included in most lease transactions that is either paid up-front or is included in the gross capitalized cost. Without an acquisition fee, lessors have to charge higher rental charges.
A. The acquisition/administrative fee usually covers a variety of administrative and insurance or risk-related costs. These may include the costs of obtaining a credit report, verifying your insurance coverage, checking the accuracy and completeness of the lease documentation, entering the lease in data processing and accounting systems, and purchasing insurance for or reserving funds for residual value losses, gap coverage losses and other lease losses (e.g., some lessee excess wear and tear costs if specified in the lease agreement). It is a charge included in most lease transactions that is either paid up-front or is included in the gross capitalized cost. Without an acquisition fee, lessors have to charge higher rental charges. Back to the top Q12.
Postoak, all lending institutions charge what is commonly called an acquisition fee, sometimes also known as a bank fee, on their leases. This money goes directly to the lending institution and dealerships have no authority to waive it. Some banks do allow their dealerships to mark-up their base acquisition fee however to bake additional profit into a deal. I know what sort of acquisition fee all of the captive finance companies out there charge on their leases and would be more than happy to let you know if I believe your dealership is marking your fee up.
