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 tools and financial calculators that provide objective and unique content, by enabling you to conduct your own research and compare information 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 offers that appear on this website are provided by companies who pay us. This compensation may impact how and where products appear on this site, including such things as the order in which they appear within the listing categories and other categories, unless prohibited by law. Our mortgage, home equity and other home lending products. However, this compensation will have no impact on the content we publish or the reviews that appear on this website. We do not cover the vast array of companies or financial deals that might be open to you. SHARE Nejron Photo/Shutterstock
2 min read Published on February 26, 2022.
Written by Zina Kumok. 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 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 cost of college as well as dissecting the complexity in student loans. The Bankrate promises
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This compensation could impact how, where and in what order products are listed, except where prohibited by law. We also offer mortgage, home equity and other home loan products. Other factors, like our own website rules and whether the product is available in your region or within your own personal credit score could also affect the manner in which products are featured on this site. While we strive to provide a wide range offers, Bankrate does not include specific information on every financial or credit products or services. An acquisition fee is a cost you pay when or other kinds of vehicles . It could also be referred to as the assignment fee, administrative fee or origination fee. The cost is usually about a couple hundred dollars, which is why it’s important to consider the cost within your financial budget while searching for a vehicle to lease. How do you calculate an acquisition fee? In almost all cases, when you get a loan you’ll have to pay an charge to initiate the loan with the lender. The fee typically is used to fund the process of establishing the loan and running the credit report on the consumer. For leases on cars, this is known as an acquisition fee . It can also be referred to as a bank fee or administrative fee. The acquisition fee could be billed upfront or rolled into your monthly lease payments. What is the cost of an acquisition fee? An acquisition fee for the lease of a car typically 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 dealing with, as per Edmunds. In general, the more costly the vehicle, the more expensive the acquisition cost. A luxury vehicle will almost always come with an acquisition cost that is higher than a mid-range sedan. Contrary to interest rates, an acquisition fee isn’t affected by the person who is borrowing the money’s credit score, income or any other personal variables. What can I do to determine whether my loan includes an acquisition fee? The most effective way to find out if your lease comes with an acquisition cost is to contact the lender or the dealer directly. If you already have the documents, go through it carefully to determine whether there is the mention of an acquisition cost. Lenders are good at concealing fees in fine print, so it may be difficult to identify. The acquisition fees could also be included in your monthly lease payments. It doesn’t matter if it’s paid upfront or part of your monthly lease installments legally, lenders are supposed to make clear the fees and charges when you inquire. Are acquisition fees negotiable? Like buying cars and a home, you must at a minimum try to bargain. The acquisition fee as well as other lease-related features like the value of trade-in, interest rate and loan duration can be discussed. If it doesn’t work out it’s possible to search for a lease somewhere else that doesn’t include an acquisition cost. There are usually lease deals provided by both dealers and manufacturers that could provide better choices, so it’s always important to shop around. It’s also important to remember that in rare instances where you’re able to negotiate a lower cost for your acquisition with a lender, they may raise the amount of money you pay in response. Pay careful attention to the conditions of your lease agreement prior to signing it. How to pay an acquisition cost If your leasing company has the acquisition cost, the expense could be paid in advance or rolled to the cost total that is incurred by the loan. If you choose the latter option, the acquisition fee will be paid in addition to the principle that the loan is financed. This can increase monthly lease payments , and will cost you more over the long haul because of compound interest. Adding the acquisition fee to the loan could be beneficial, but it is a risk if you end up having to pay for the car. If you pay the acquisition cost prior to the time of accident and the vehicle is involved in an accident, you’ll not receive the entire acquisition cost back from your lender. But if you had rolled this acquisition charge into your loan it would be possible to recover a portion of the cost. The bottom line: Acquisition fees can be avoided if they are discovered they are there prior to signing the contract. If you attempt to negotiate the purchase cost with the leasing company and are unsuccessful, think about making a fresh offer. Beware of being pressured into accepting the lease agreement. Before you sign a lease contract take a look at several companies and see what kind of . Doing some research is the best method to reduce or eliminate the cost of acquisition. Find out more:
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Written by the contributing writer Zina Kumok has been a full-time personal finance 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 Edited by Student loans editor Chelsea has been with Bankrate since the beginning of 2020. She’s dedicated to helping students to navigate the daunting costs of college , and dissecting the complexity of student loans.
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