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 offering interactive financial calculators and tools that provide objective and unique content. This allows you to conduct your own research and compare information for free and help you make financial decisions with confidence. 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 site come from companies that compensate us. This compensation may impact how and where products are displayed on this site, including such things as the sequence in which they appear in the listing categories in the event that they are not permitted by law. Our loans, mortgage, and other home lending products. This compensation, however, does not influence the content we publish or the reviews you see on this site. We do not include the universe of companies or financial deals that might be accessible to you. SHARE Nejron Photo/Shutterstock
2 minutes read. Published on February 26, 2022.
Written by Zina Kumok. Written by Contributing writer Zina Kumok has been 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 Edited by Student loans editor Chelsea has been with Bankrate since the beginning of 2020. She is invested in helping students navigate the daunting costs of college and breaking down the complexities that are associated with student loans. The Bankrate promises
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So, this compensation can influence the manner, place and in what order items are listed and categories, unless it is prohibited by law for our mortgage or home equity products, as well as other home loan products. Other elements, such as our own rules for our website and whether a product is available in your area or at your self-selected credit score range can also impact how and where products appear on this website. Although we try to offer a wide range offers, Bankrate does not include specific information on every credit or financial products or services. An acquisition fee is the cost that you pay for acquisitions, as well as other types of vehicles . It could also be referred to as the administrative fee, the assignment fee or origination fees. The cost is usually a few hundred dollars, so it’s critical to factor the cost within your financial budget while searching for a car to lease. What is an acquisition fee? Nearly every time you apply for a loan you’ll have to pay an charge to initiate the loan with the lender. This fee generally is used to fund the process of establishing the loan and running the credit report on consumers. In the case of auto leases it is referred to as an acquisition cost and can also be referred to as an administrative or bank fee. The acquisition fee could be charged upfront or rolled into your monthly lease payments. What’s the average acquisition fee? A fee for acquisition on an auto lease generally can range from $395 to $895, but it can vary based on the car in question as well as the lease company that you’re working with, as per Edmunds. Typically, the more expensive the car, the higher the acquisition cost. A luxury car will almost always come with more expensive acquisition fees than a mid-priced sedan. In contrast to interest rates, the acquisition fee isn’t affected by the borrower’s income, credit score or any other personal variables. What can I do to determine if my loan comes with an acquisition cost? The most effective way to find out whether your lease has an acquisition cost is to ask the lender or dealer directly. If you have the lease, you should read carefully to find out if there is any mention of an acquisition cost. The lenders are adept in hiding fees in the fine print, and it can be hard to identify. Acquisition fees can also be bundled into your monthly lease payments. Whether it’s paid upfront or as part of your monthly lease installments legally, lenders are required to inform you of the fees and charges if you ask. Are acquisition fees negotiable? Like when you purchase cars it is recommended to at least attempt to negotiate. The acquisition fee as well as other lease-related features like the value of trade-in or interest rate, as well as loan duration can be discussed. If the deal doesn’t work, you can always look for a new lease that doesn’t require the acquisition cost. There are usually lease deals provided by both dealers and manufacturers which could offer better alternatives and it’s important to look around. It’s important to note that in the very rare occasions where you are able to negotiate a lower cost for your acquisition with an lender and they might increase your money factor in response. Be sure to read the conditions of your lease agreement prior to signing it. How do you pay an acquisition fee If the leasing company charges fees for acquisition, this expense can either be paid out in advance or added in the overall cost for the loan. If you choose the alternative, the acquisition fee is included in the total amount of the lease. This can increase your monthly lease payment and cost you more over the long run because of compound interest. In addition, adding the acquisition fee the loan can help, however, if you do end up destroying the vehicle. If you pay the acquisition fee in advance and your car ends up damaged in an accident, you won’t get any of the fees back from the lender. However, if you’d had the option of rolling the acquisition fee into the loan, you’d be able to recoup part of the cost. The bottom line Acquisition fees can only be avoided if you notice the fees before signing the contract. If you try to negotiate the cost with the leasing company but fail, you should consider finding a new offer. Do not be compelled to agree to the lease agreement. Before signing a lease agreement, contact several companies to see what kind of . Doing some research is the best way to minimize or avoid the cost of the acquisition. Find out more:
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Written by the contributing writer Zina Kumok 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 Edited by Student loans editor Chelsea has been working at Bankrate since early 2020. She’s dedicated to helping students navigate the high costs of college , and breaking down the complexities of student loans.
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