What is an acquisition cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by providing you with interactive financial calculators and tools as well as publishing objective and original content. We also allow users to conduct research and analyze data for free – so that you can make sound 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 offers that appear on this website are provided by companies who pay us. This compensation can affect the way and where products are displayed on the site, such as, for example, the sequence in which they appear within the listing categories and other categories, unless prohibited by law. Our loan products, such as mortgages and home equity and other products for home loans. However, this compensation will affect the content we publish or the reviews that you see on this site. We do not include the entire universe of businesses or financial offers that may be available to you. SHARE Nejron Photo/Shutterstock
2 min read Published February 26, 2022
written by Zina Kumok. Written by a contributing writer Zina Kumok is a full-time personal finance writer since 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 Chelsea Wing Editor: student loans editor Chelsea has been with Bankrate since the beginning of 2020. She’s committed to helping students navigate the daunting costs of college , and dissecting the complexity of student loans. The Bankrate promise
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Therefore, this compensation may affect the way, location and when products appear in listing categories, except where prohibited by law for our mortgage home equity, mortgage and other home lending products. Other factors, such as our own proprietary website rules and whether the product is offered in the area you reside in or is within your own personal credit score can also impact the way and place products are listed on this site. We strive to offer the most diverse selection of products, Bankrate does not include details about each credit or financial product or service. A acquisition fee is a cost you pay when you purchase other kinds of vehicles . It can be called the administration fee, assignment fee, or origination fee. The typical fee is around a few hundred dollars so it’s critical to factor the cost within your financial budget while shopping for a car to lease. How do you calculate an acquisition cost? Nearly every time you apply for an loan, you will have to pay some sort of initial fee or charge back to your lender. This fee generally will cover the cost of launching the loan and conducting an credit check on the consumer. In the case of auto leases it is referred to as an acquisition fee and can also be referred to as a bank fee or administrative fee. The acquisition cost can be paid upfront or added into monthly lease payments. How much is an acquisition fee? A fee for acquisition on an auto lease typically can range from $395 to $895 but can differ based on the vehicle in question and the leasing company you’re dealing with, according to Edmunds. Typically, the more expensive the vehicle, the more expensive the acquisition cost. A luxury vehicle is almost always accompanied by more expensive acquisition fees than a sedan that is mid-range. Unlike interest rates, the acquisition cost isn’t affected by the person who is borrowing the money’s credit score, income or other personal aspects. How can I tell whether my loan has an acquisition fee? The easiest way to figure out whether your lease is subject to an acquisition fee is to inquire with the lender or the dealer directly. If you already have the paperwork, read carefully to find out if there is any mention of an acquisition fee. The lenders are adept in hiding fees in the fine print, so it may be difficult to spot. Acquisition fees are also bundled into the monthly lease payment. Whether it’s paid upfront or as part of your monthly lease installments, legally, lenders are required to inform you of any fees or extra charges in the event that you inquire. Are acquisition fees negotiable? Like when you purchase cars, you should at least attempt to bargain. The acquisition fee and other lease-related features like the value of trade-in, interest rate and loan duration can be discussed. If the deal doesn’t work it’s possible to search for a new lease that doesn’t require an acquisition fee. There are typically lease specials that are offered by dealers and manufacturers that could provide better choices, so it’s always important to shop around. It’s important to note that in the rare cases where you’re able to negotiate a lower acquisition fee with an lender and they might increase the amount of money you pay in response. Be sure to read the lease agreement before signing on. What is the best way to pay for an acquisition fee If the leasing company requires the acquisition cost, the cost can be paid in advance or rolled in the overall cost that is incurred by the loan. If you choose the second option, the fee will be added to the principal for the lease. This can increase your monthly lease payment and cost you more over the long run due to the compound interest. In addition, adding the acquisition fee the loan can help, however it is a risk if you end up totaling the car. When you have paid the purchase cost in advance and your car ends up involved in an accident, you won’t receive the entire acquisition fee back from the lender. However, if you’d had the option of rolling an acquisition cost into the loan it would be possible to recoup part of the money. The bottom line is that acquisition fees can only be avoided if you know about they are there prior to signing the contract. If you attempt to negotiate the cost with the leasing company and are unsuccessful, think about making a fresh offer. Beware of being pressured into accepting the lease agreement. Before finalizing a lease agreement take a look at several companies and determine what type of . Shopping around is the best method to reduce or eliminate the acquisition fee. 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Written by the contributing writer Zina Kumok has been a full-time financial 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 Chelsea Wing Editor: Student loans editor Chelsea has been working at Bankrate since the beginning of 2020. She’s dedicated to helping students navigate the high cost of college as well as breaking down the complexities of student loans.
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