One of my buddies brought this up and figured I would ask on here to see what others knew. When you negotiate with a dealer for a certain selling price or percentage off the MSRP, does that usually include the acquisition fee or is it assumed that the acquisition fee is in addition to that?
MSRP includes destination, irrespective or lease or finance.
All leases have an acquisition fee which is in addition to MSRP.
My understanding is that most if not all of Acq Fee is payed back to dealer for facilitating the lease. Similar to dispo fee.
Basically, dealer has built in profit (doc and acq fees) for every lease in addition to any other mark-up and dispo on returns.
Typically the dealer keeps the profit from marking up the buy rate (some banks take a percentage). I have never heard of a bank giving a dealer part of the acquisition fee.
He negotiated the selling price as $58000 with the dealer and using the calculator, it came out to $619/month including tax which is what the dealer had told him his monthly payment would be. But when he received the actual lease agreement, the gross capitalized cost is listed as $59,095 which is basically the selling price plus the acquisition fee of $1095. The amount due at lease signing also includes the $1095 acquisition fee, doc fee ($549), MSDs, and the registration fees.
You can still get to $619/month using the calculator but only if you change the selling price to $59095 and also check off to pay the acquisition fee upfront too…
That is what it should show if the acquisition fee is capitalized. Adjusted cap cost != Selling price.
Now, the fact that it is shown on both the cap cost and the up front costs is problematic. Do you have access to a copy of the contract?
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I think you are correct that the $1095 acquisition fee should be included in the gross capitalized cost and it is also included on mistake in the amount due at lease signing section as well (since it is being capitalized).
Is this a BMW? I thought Acq Fee was $925 and can’t be marked up?
$1,095 sounds like a MB Acq Fee to me.
Did he agree to anything in the finance office? Wear and tear, maintenance, etc?
Yeah you’re right it was MB not BMW, just checked with him. And no didn’t mention any contracts/extras that were agreed to
Looks like dealer is double dipping.
Ask for correction and find out how reputable they are.