Disposition Fee.
In plain English
A disposition fee is a set amount your leasing company charges when you return the vehicle at the end of the lease instead of buying it. It is meant to cover their cost of inspecting, cleaning, and reselling the car. The fee is spelled out in the lease contract before you sign, so it is not a surprise if you read it. Many leases waive the fee if you lease or buy another car from the same company.
01Why it matters
This is a real cost of walking away from a lease that people forget to budget for, and it lands on top of any mileage or wear-and-tear charges. Knowing it is coming lets you plan, and sometimes negotiate it away up front.
02The math, step by step
You return your leased SUV at the end of the term in good shape. The contract lists a flat disposition fee, say $350, which you owe even though there is no mileage overage and no damage, simply for handing the car back rather than buying it. The exact amount is set in your own lease, so read it before you sign.
03What this is NOT
A disposition fee is not the same as an acquisition fee. The acquisition fee is charged at the start of a lease to set it up; the disposition fee is charged at the end when you return the car.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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