Anyone if I am leasing what the dealer acquisition fee is? Not what he charges but is standard?

 

$795

 

This is essentially equivalent to "points" in a mortgage, and increases the interest cost or, in the case of a lease, the "money factor." It doesn 't seem to be very negotiatable, except by asking for another $795 off of the "capitatlized cost."

 

For our lenders it does cover some hard costs like residual value insurance, GAP insurance and contingent liability insurance.

 

One would think tht would be covered in the money factor, just as the lessor's cost of money is covered. If is to cover lenders' cost why is it referred as a dealer acquisition fee. I don't mean to sound skeptical but a dealer acquisiton fee is a relatively new charge, whereas the costs/risk you refer to have always been there. If there are serious risks associated with the residual value, then wouldn't
the residual be adjusted, and if there is to be gap insurance, wouldn't there be a charge for that.

 

A lot has changed over the last 10 years in regards to leasing from the lender (lessor) side. Artificially inflated residual values have cost many millions of dollars. This acquisition fee is charged by the bank and not the dealer. The added cost of providing a lease, as I listed previously, far exceed a typical finance agreement.


For accounting purposes these additional are not added into the rate. GAP has only recently been included. In the late 90's it was the responsibility of the lessee to obtain this insurance. Most lessors now include it and fund it from the acquisition fee.

Bottom line is the lessee will pay for these things either as an added fee or in the rate.