By using this site, you agree to the Privacy Policy and Terms of Use.
Accept

Indestata

  • Home
  • News
  • Personal Finance
    • Credit Cards
    • Loans
    • Banking
    • Retirement
    • Taxes
  • Debt
  • Homes
  • Business
  • More
    • Investing
    • Newsletter
Reading: What a lease disposition fee is — and how to avoid it
Share
Subscribe To Alerts
IndestataIndestata
Font ResizerAa
  • Personal Finance
  • Credit Cards
  • Loans
  • Investing
  • Business
  • Debt
  • Homes
Search
  • Home
  • News
  • Personal Finance
    • Credit Cards
    • Loans
    • Banking
    • Retirement
    • Taxes
  • Debt
  • Homes
  • Business
  • More
    • Investing
    • Newsletter
Follow US
Copyright © 2014-2023 Ruby Theme Ltd. All Rights Reserved.
Indestata > Homes > What a lease disposition fee is — and how to avoid it
Homes

What a lease disposition fee is — and how to avoid it

TSP Staff By TSP Staff Last updated: September 27, 2024 6 Min Read
SHARE

Key takeaways

  • Leasing companies charge a disposition fee to cover the cost of cleaning the vehicle when you return it at the end of your lease.
  • A lease disposition fee is charged in addition to your monthly payments and other fees, like mileage fees and wear-and-tear fees.
  • You can avoid paying a disposition fee by purchasing your vehicle at the end of the lease period.

At the end of your lease, you can return the vehicle — and you will likely be charged a lease disposition fee. This charge is assessed by the leasing company and covers the cost of preparing the car for the next driver.

That said, you may be able to avoid paying it through negotiation or by buying the car.

What is a disposition fee?

A lease disposition fee is typically around $350, according to Kelley Blue Book. The make and model of the vehicle, the dealership and your location all influence the actual cost of a disposition fee.

Leasing companies charge a disposition fee to cover the cost of cleaning up and repurposing your old car for resale. The disposition fee, or turn-in fee, is one of many costs that may come as a surprise if you haven’t had a lease before.

It is separate from your monthly payment but may be charged with other types of fees, like early termination charges, excessive mileage charges and excessive wear-and-tear charges.

Do you have to pay the disposition fee?

If a disposition fee is included in your lease agreement, you can avoid it by purchasing your vehicle or signing another lease — or negotiating for its removal before you sign.

  • Purchase your leased vehicle: You can buy your leased vehicle if your contract includes a purchase option. If you buy it, the leasing company may choose not to charge you a disposition fee since it doesn’t have to prepare the car for another buyer.
  • Sign another lease: If you sign another lease with the same car dealership or leasing company, it may automatically waive the disposition fee. Otherwise, you can negotiate a fee waiver when structuring the new lease agreement.
  • Check the contract before you sign: If there is a disposition fee in your contract, ask for it to be waived and removed from your lease agreement. The leasing company may not agree — but it’s worth a shot.

Bankrate tip

If you’re not sure whether you want to get a new lease or buy your current car, take the time to calculate the cost of buying versus leasing so you can make the right decision — and potentially avoid a disposition fee.

Other auto leasing fees to look out for

A lease disposition fee isn’t the only charge you could expect to face when you determine how much a car lease costs. Look out for other fees, including:

  • Excessive mileage: If you go over the mileage you’re allotted in your lease, you’ll have to pay an excessive mileage fee.
  • Wear-and-tear: If your car has some major dings, scratches or stains, you could face this charge based on the cost of the repairs.
  • Early termination fee: If you return your lease before your term expires, you could end up paying extra to get out of your contract.
  • Purchase option charge: Some dealerships may have a fee if you decide to buy the car once your lease ends.
  • Acquisition fee: The acquisition fee covers the leasing company’s administrative expenses for initiating or originating the lease. This fee can be $595 to $1095, according to data from Edmunds.

Not all fees are charged or required with a lease agreement. It’s important to review your contract and ask any questions before signing. You may even be able to negotiate your lease to lower or remove them entirely, but you should still count on paying a few additional fees when you lease a car.

The bottom line

Before you lease a vehicle, read the fine print to ensure you’re not caught off guard by any unexpected fees or expenses. As you read the lease agreement, be on the lookout for a disposition fee.

If you don’t want to pay, ask for the lease disposition fee to be waived before signing the contract. Alternatively, you could avoid paying it by agreeing to a new lease or purchasing the vehicle at the end of your lease. If you opt for a lease buyout, shop around first to be sure you’re getting the best auto loan rates possible.

Read the full article here

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Share This Article
Facebook Twitter Copy Link Print
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Previous Article Guide to Citi Concierge
Next Article Why I love the Blue Cash Preferred Card from American Express
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FacebookLike
TwitterFollow
PinterestPin
InstagramFollow
TiktokFollow
Google NewsFollow
Most Popular
9 Rules Every Savvy Saver Breaks About 10 Ways To Save Money
May 10, 2025
10 Airline Freebies Hiding in Coach—Snag Them Without Elite Status
May 10, 2025
What Are Blue-Chip Stocks? | Bankrate
May 9, 2025
State Farm Drive Safe and Save
May 9, 2025
11 Underrated Email Newsletters That Drop Exclusive Coupon Links Every Week
May 9, 2025
5 Moms, 5 Paths & A Shared Commitment to Financial Wellness
May 9, 2025

You Might Also Like

Homes

What Is An Adjusted Balance?

9 Min Read
Homes

What Is A Subprime Mortgage?

14 Min Read
Homes

How To Start Traveling With Points, Miles And Credit Cards

22 Min Read
Homes

What Is Adverse Possession? | Bankrate

10 Min Read

Always Stay Up to Date

Subscribe to our newsletter to get our newest articles instantly!

Indestata

Indestata is your one-stop website for the latest finance news, updates and tips, follow us for more daily updates.

Latest News

  • Small Business
  • Debt
  • Investments
  • Personal Finance

Resouce

  • Privacy Policy
  • Terms of use
  • Newsletter
  • Contact

Daily Newsletter

Subscribe to our newsletter to get our newest articles instantly!
Get Daily Updates
Welcome Back!

Sign in to your account

Lost your password?