What Is a Lease Disposition Fee?

Written by Ashley FranklinUpdated: 16th Feb 2022
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When you lease a car, there are several fees that you need to be aware of. One such fee is the disposition fee. This is a fee charged by the leasing company when your lease ends and you return the vehicle.

This blog post will explain what a disposition fee is and how to avoid paying it. We’ll also cover other standard car leasing fees and answer some frequently asked questions about lease disposition fees.

What Is a Lease Disposition Fee?

A lease disposition fee is a fee that is charged by the leasing company when you do not purchase your vehicle at the end of a car lease. This fee is intended to cover the costs associated with cleaning and preparing the car for sale.

This includes cleaning the interior and exterior of the car, removing all personal belongings, and returning the vehicle to its original condition. The cost of transportation and storage may also be included in the disposition fee.

Disposition fees can be a little confusing, but they are an essential part of car leasing. By understanding what they are and when you have to pay them, you can avoid any surprises down the road.

>> More: How to Get Out of a Car Lease

How Much Is a Disposition Fee?

The amount of the disposition fee varies from leasing company to leasing company. However, the average lease disposition fee is between $300 and $400.

This amount may seem high, but it is important to remember that the disposition fee covers the costs of preparing the car for sale. So, if you decide to purchase your leased vehicle at the end of your lease, you will not have to pay this fee.

Do I Have to Pay the Disposition Fee?

In most cases, you will be required to pay the disposition fee. However, there are a few exceptions.

If you decide to purchase the vehicle at the end of your lease, the leasing company will typically waive the disposition fee. Similarly, if you return your leased car to the dealership and purchase another vehicle from them, you may not have to pay the disposition fee.

In addition, some leasing companies may waive the cost if you buy an extended warranty or maintenance plan. It is important to be aware of these exceptions before signing your lease agreement.

If you are not sure whether you have to pay the disposition fee, be sure to ask your leasing company. Always check your lease agreement for more information. Be informed and knowledgeable of the fees you are incurring to avoid any unpleasant surprises or common leasing mistakes.

Are Disposition Fees Negotiable?

Disposition fees can be negotiable at the beginning of your lease. However, once the lease has been signed, you are generally legally obligated to pay the fees.

In order to negotiate lease disposition fees, work with a reputable car leasing company or dealership. They will be able to help you get the best deal possible on your lease.

Negotiating disposition fees can save you a lot of money in the long run. So, be sure to ask about all discounts when you are shopping for a car lease.

Always know what you are signing before you agree to anything and get a complete breakdown of all fees and charges associated with your lease. This will help you understand exactly what you are getting into and how to avoid any unnecessary costs when leasing a vehicle.

How to Avoid Paying the Car Lease Disposition Fee

If you don’t want to pay the disposition fee, there are a few things that you can do.

  1. First, try to negotiate the fee with your leasing company. Many companies will be willing to waive the fee if you return the car in good condition.
  2. Second, purchase your leased vehicle at the end of your lease. This will eliminate the need to pay the disposition fee.
  3. Finally, return your car to the dealership when your lease expires and lease or purchase another vehicle from them. If you do this, you may be able to avoid paying the disposition fee altogether.

While in most cases you will be obligated to pay dispositions fees, certain car dealerships and leasing companies may be willing to negotiate a lower fee or waive it entirely if you meet certain conditions.

Other Car Leasing Fees to Watch Out For

In addition to car lease disposition fees, there are several other car leasing fees to be aware of.

These extra fees include:

  • Security deposit: This is a refundable deposit that you may be required to pay when leasing a car. The security deposit amount varies from company to company, but it is typically equal to one month’s payment.
  • Processing fee: This fee covers the costs associated with setting up your lease agreement.
  • Acquisition fees: These are fees the leasing company charges when you lease a car.
  • Documentation fees: This includes administrative fees charged by the leasing company or dealership.
  • Advertising fees: Some leasing companies may charge you for advertising costs.
  • Sales tax: This is the state tax that you will be charged on your car lease. The amount varies and is a percentage of the purchase price of the vehicle.
  • Late payment fees: These are charged when you miss a payment on your car lease. The amount of the late payment fee varies from dealer to dealer, but it is typically between $25 and $50.
  • Early termination fees: If you decide to terminate your car lease before the end of the term, you may be charged an early termination fee. This fee can range from $200 to $500.
  • Vehicle turn-in fees: Some dealerships charge a vehicle turn-in fee when you return your car at the end of your lease. This fee is usually around $200.

Before you sign your car lease agreement, be sure to ask about all of these fees. By being aware of these extra charges, you can avoid future issues with your lease and unnecessary costs.

Do All Car Leases Have a Disposition Fee?

No, not all car leases have a disposition fee. However, most leases do include this fee. Leasing companies charge this fee to cover the costs of preparing the car for sale.

If you are unsure whether your lease includes a disposition fee, contact your leasing company and ask for more information. They will be able to tell you exactly which fees apply to your specific lease agreement.

In most cases, you will be required to pay the disposition fee. However, there may be some instances where you can negotiate a lower fee or have it waived altogether.

When Do I have to Pay the Disposition Fee?

The disposition fee must be paid when you return a car to the leasing company. This payment is generally due at the time you turn in the vehicle. Be sure to read your lease agreement carefully to understand when and how you are supposed to pay the disposition fee.

If you are unable to pay the disposition fee, contact your leasing company and ask for more information. They may be able to work with you to come up with a payment plan to help you cover the cost of this fee.

Avoid paying the disposition fee by considering purchasing the vehicle outright or leasing or buying from the same dealership.

Bottom Line: What Is a Lease Disposition Fee?

Lease disposition fees can include the costs associated with refurbishing and transporting a vehicle for resale. This fee is paid at the time of vehicle turn-in and is generally due in full.

Disposition fees can be a pain, but they’re something that you’ll have to deal with when leasing a car. However, there are ways to avoid paying them altogether.

If you’re willing to do a bit of negotiating or purchase the vehicle at the end of your lease, you can easily avoid this extra fee. Be sure to ask your leasing company about all of the fees involved in your specific lease agreement to know what to expect.

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Ashley Franklin
Ashley Franklin

Ashley Franklin is a professional writer and financial literacy expert. Ashley double-majored in Computer Science and Communications, and she brings her talents to the forefront with writing about personal finance and investing. Having worked with renowned international websites and publications, Ashley has found that there’s no one-size-fits-all solution to financial management. That’s why her articles are all about finding what works for you.