What’s an acquisition fee? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial choices by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling users to conduct research and analyze data for free to help you make informed financial decisions. Bankrate has partnerships with issuers, including 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 who pay us. This compensation may impact how and where products are displayed on this site, including, for example, the order in which they appear in the listing categories and other categories, unless prohibited by law for our mortgage, home equity, and other products for home loans. But this compensation does not influence the information we publish, or the reviews that you read on this site. We do not contain the universe of companies or financial offers that may be accessible to you. SHARE Nejron Photo/Shutterstock
2 minutes read. Published 26 February 2022
Written by Zina Kumok Written by 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 Edited by Student loans editor Chelsea has been with Bankrate since the beginning of 2020. She’s dedicated to helping students to navigate the steep costs of college , and simplifying the complex world in student loans. The Bankrate promises
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Therefore, this compensation may affect the way, location and when products appear in listing categories and categories, unless it is prohibited by law. This is the case for our mortgage, home equity and other products for home loans. Other factors, like our own website rules and whether or not a product is available in your region or within your own personal credit score can also impact the manner in which products are featured on this website. While we strive to provide an array of offers, Bankrate does not include specific information on every financial or credit item or product. A acquisition fee is a cost that you pay for acquisitions, as well as other types of vehicles . It can also be referred to as the assignment fee, administrative fee or origination fee. The typical fee is around a few hundred dollars therefore it is important to include the cost in your spending plan when searching for a car to lease. Is there an acquisition cost? Nearly every time you take out an loan, you will have to pay an origination fee to the lender. This fee generally will cover the cost of launching the loan and also running the credit report on consumers. In the case of auto leases, this is known as an acquisition fee and is also sometimes labeled a bank fee or administrative fee. The acquisition cost can be paid upfront or added into the monthly lease payment. How much is an acquisition fee? A fee for acquisition on an auto lease generally can range from $395 to $895 but can differ based on the vehicle in question and the leasing company you’re working with, as per Edmunds. Typically, the more expensive the car, the greater the cost of acquisition. A luxury vehicle is almost always accompanied by more expensive acquisition fees than a mid-priced sedan. Contrary to interest rates, an acquisition fee isn’t affected by the borrower’s income, credit score or other personal factors. How do I know whether my loan comes with an acquisition cost? The easiest way to figure out whether your lease has an acquisition cost is to ask the lender or the dealer directly. If you already have the paperwork, read it carefully to determine whether there is anything mentioning an acquisition cost. The lenders are adept in hiding fees in the small print, which is why it may be difficult to spot. The acquisition fees could also be added to your monthly lease payments. If they are paid in advance or part of your monthly lease installments, legally, lenders are required to disclose the fees and charges in the event that you inquire. Are acquisition fees negotiable? Like when you purchase automobiles and a home, you must at least try to negotiate. The acquisition fee and other lease terms, such as trade-in value or interest rate, as well as loan duration may be negotiable. If it doesn’t work out then you could always search for a different lease which doesn’t have the acquisition cost. There are usually lease deals that are offered by dealers and manufacturers that might offer better options and it’s important to research. It’s also important to remember that in the very rare occasions where you are able to bargain a lower purchase price with an lender and they might increase the amount of money you pay in response. Be sure to read the lease agreement prior to signing it. What is the best way to pay for an acquisition fee If the leasing company charges fees for acquisition, the cost can be paid in advance or rolled into the total cost that is incurred by the loan. If you choose the second option, the fee will be added to the principal amount of the lease. This will increase the your monthly lease payment and cost you more over the long term due to compound interest. In addition, adding the acquisition fee the loan could be beneficial, but, if you end up totaling the vehicle. If you pay the acquisition cost in advance and your car ends up in an accident, you won’t receive any of the acquisition fees back from the lender. But if you had rolled this acquisition charge into your loan and then refinanced the loan, you’d be able to recoup part of the money. The bottom line is that acquisition fees can only be avoided if you notice the fees before signing the contract. If you attempt to negotiate the purchase cost with the leasing company and fail, you should consider seeking a new deal. Don’t be pressured to accept the lease agreement. Before finalizing a lease agreement, contact several companies to find out what they offer . Doing some research is the best way to cut down or eliminate the cost of acquisition. Learn more:
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Written by Contributing writer Zina Kumok. 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 Editor: student loans editor Chelsea has been working at Bankrate since the beginning of 2020. She’s committed to helping students manage the steep costs of college , and simplifying the complex world that are associated with student loans.
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