Car Lease Acquisition Fee

One downside to leasing a car is the so-called “car lease acquisition fee” the financing company will saddle you with when you sign on the dotted line.

This acquisition fee, also known as a bank fee or assignment fee, is essentially charged to cover processing and origination costs involved with setting up your new lease, similar to the fee you’d see at your local gym upon sign-up, which might be referred to as an initiation fee.

It covers the costs of setting up your account, verifying insurance coverage and other information, paperwork, and so on, but like many fees of this nature, is grossly overpriced.

The fee was supposedly invented by car dealers, but eventually claimed by the car leasing companies who didn’t want to miss out on more fee-based income.

The acquisition fee varies by make and model, and typically hovers around the $400-$500 range, though it can be as high as $1,000 or more.

It is either charged as an upfront, out-of-pocket fee or as part of the capitalized cost of the lease, the amount actually being financed.

If you don’t see the fee in the itemized list of costs, it’s likely rolled into the capitalized cost, so be sure to ask what the cost is before proceeding with the deal, as it’s not wise to simply accept an undisclosed, hidden fee.

If it is indeed a built-in cost, you may pay something like $25 a month in acquisition costs as part of your overall monthly car lease payment.  That’s why it’s important to break down your monthly payment with the dealer so you know how they came up with that magic number.  See what makes up a car lease payment.

Unfortunately, this fee is typically non-negotiable because it’s charged by the leasing company and not the dealer, who isn’t present during the transaction.

For this reason, it’s best to find out who is financing the vehicle before agreeing to lease the car, that way you can double-check to see what they charge for acquisition costs to make sure it all adds up.

While you may not be able to waive the fee, the dealer may be able to push the fee higher, so if you know the true cost charged by the leasing company, you can avoid getting taken for a ride.

Keep in mind that when you see a so-called zero-down lease offer in print or on TV, it usually does not include the car lease acquisition fee.  Go figure.