Acquisition Fee

An acquisition fee, in the auto industry, is a fee that is charged by a lender or leasing company to cover the administrative costs associated with setting up a new car loan or lease. This fee is often added to the total amount financed or leased.

In car loans, the charge is added to the loan amount when you finance the purchase of a vehicle through a lender. It is usually a one-time fee charge and is not included in the car loan’s annual percentage rate (APR).

In car leases, it is also called a bank fee or origination fee, which is a charge imposed by automotive leasing companies for establishing a lease. It is used to cover the costs associated with the lender’s administrative tasks in setting up the lease, including obtaining a credit report and verifying personal information. It is important to note that the amount of the fee is not dependent on the borrower’s credit score or other qualifications.

Is the acquisition fee required by law?

No, it is not mandatory anywhere in the United States. The amount and whether or not an acquisition fee is charged can vary depending on the dealership or lender. It’s always good practice for buyers or clients to ask for an explanation of all fees charged in a car loan or sale before signing any agreement.

How much is the acquisition fee?

The amount of the fee can vary depending on the dealership or lender, but it is typically in the range of around $395 to $895. The fee can vary depending on the lender and the loan terms, and it is typically a percentage of the loan amount, such as 1% or 2%. In some cases, the fee may be rolled into the overall cost of the loan or lease, so it may not be listed as a separate line item on the contract.

Is it possible to negotiate the acquisition fee?

Yes, like other charges associated with purchasing a vehicle, this fee may be negotiable depending on the dealership or lender. It’s important to keep in mind that the dealership or lender may be less likely to negotiate on the acquisition fee if they are offering a lower interest rate or other incentives on the vehicle. You can ask the salesperson or lender if the acquisition fee is negotiable and if so, use this as a bargaining chip in negotiations for the price of the car, the interest rate, or other terms of the sale or loan. It is always better to be informed and ask questions before signing any agreements.