The term, acquisition fee, as it relates to car leasing, refers to an administrative fee that is included in all leases. It is sometimes called a “bank fee” or “assignment fee.” The fee is sometimes not disclosed in a lease contract.

An acquisition fee is charged by lease companies, not dealers. Dealers typically do not make a profit on this fee, although some lease companies may “kick back” part of the fee to dealers as a reward for sending them business.

Acquisition fees vary among lease companies and are usually higher for more expensive vehicles. Generally, acquisition fees range from about $395 to $1095, with an average of about $595.

The fee is typically not negotiable since it is set by the lease company and dealers do not have control of it.

In many leases, the fee is simply added to capitalized cost, which is the amount being financed in the lease. It appears in a lease contract as “gross capitalized cost” which includes the cost of the vehicle with the acquisition fee added, but often not itemized. In this respect, it is a “hidden” fee.

However, it is becoming more common for the acquisition fee to be itemized in lease contracts.

In some cases, lease companies ask customers to pay the acquisition fee up front in cash, in which case the fee is disclosed and itemized in the lease contract.

Lease companies in a few states with tough vicarious liability laws, such as New York, have charged higher fees to offset the increased risk of being involved in lawsuits. Even though the laws have changed in New York, lease companies seem to be still charging the higher acquisition fees. The fees often exceed $1000 even for low-priced cars.

Lease acquisition fees tend to increase over time as automotive finance companies and dealers seek additional ways to make profit and cover increasing costs. In the future, acquisition fees of $795-$995 will be common.

For additional information about car lease acquisition fees and other leasing charges and sales taxes, see Lease Fees and Taxes.