In a car lease, you make the lease payment at the beginning of a month. It is opposite to having a loan in which you pay at the end of the month. It means that your first monthly lease payment is due at lease signing. Consequently, you do not have a payment due at the end of the lease. The first monthly payment is in addition to a down payment or a security deposit.
Acquisition Fee
It is also known as the bank fee. This fee is actually an administrative fee charged by the leasing company to setup the lease. This fee is normally added to the cap cost and it increases your monthly payments. There is also an option to pay it upfront. The acquisition fee ranges from $250 to $1000 depending on the type of vehicle. Security deposit is sometimes waived in exchange for a higher acquisition fee. Acquisition fees are typically lower on auto loans as compared to the loans. The Money Factor is also lower than the interest rates on loans.
Disposition Fee
This is also one of the administrative fees. Most leases have this fee at the end of the lease to compensate the lessor for the expenses of disposing of the vehicle. A similar fee may also be included even if you decide to purchase the vehicle at the end of the lease. The disposition fee usually ranges from $200 to $450.
Initial Lease Fee (Due at Signing)
The lease contract includes all the fee and charges that are due at the signing, also called the initial lease fee. This will include first payment, any security deposit, any down payment, any sales tax on the down payment, documentation, registration, license, tag and title fees, and the acquisition fee if it is not capitalized. This amount varies significantly due to the wide variety of fees that may or may not be included at the signing.
