Disposition Fee Interest Question

Ask the Hackrs
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1

When adding the Disposition fee into the monthly payments does it get charged interest?

I am talking out a lease deal with a dealership and they added it in monthly. I have the means to pay it up front. They said they submitted the deal with that included and cant take it out. They also said in the case that Chrysler doesn’t charge them the fee(they are buying out my old vehicle, not grounding it) they would cut me a check for the amount back. My issue is if I am getting charged interest on that amount, it would cost me a lot more in the end.

2

Are you asking about disposition or acquisition fees?

Disposition fees are generally paid at the very end on turn in. Never have I heard of someone paying it up front or rolling it in.

If you’re rolling it in, I’d expect to pay interest and taxes on it(depending on state). With that said, assuming reasonable MFs, the interest on it over the entire lease is probably $20. The taxes would generally be higher.

Why are they trying to roll it in or pay it upfront?

3

disposition fee. I already know the acquisition fee is included

4

It seems like OP is saying they rolled in the disposition fee for OP’s prior lease that is being turned in/bought by the dealer (possibly early?). Not the future disposition fee for the current lease.

5

That would make significantly more sense

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6

Bingo. That is what im saying.

7

What is the mf on the new lease? Have you already signed? What is your sales tax rate?

8

If they are buying the previous lease out from Chrysler, why would they pay a disposition fee? If there is one, it would be billed to you directly, not to the dealer.
Am I missing something?

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9

That is what i told them as well. They mentioned that since they are going with Ally bank this time they had to cover the cost just in case.

10

The sell rate is 7.25 and sales tax is 7.125

11

Maybe they are not actually buying it. Maybe they are paying it off on your behalf, and turning it in.

12

They are buying it since there is positive equity in the deal.

13

Did you get a buyoff quite from carvana and such to see what market value is?

The interest and tax is adding about $50 to your cost, assuming a $400 dispo fee and a 36 month lease.

The bigger confusion is why are they doing this at all. This sounds more like them hiding an extra $400 in profit and calling it a disposition fee that doesn’t actually exist.

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14

I used all the trade in sites to compare. Do not have a carvana close to me. And yeah they are throwing me off but they say they are 99% sure they will end up cutting me a check back for the added amount.

15

Carvana is online, not CarMax.

How did their numbers compare to what the dealer is offering on the buy off.

17

Right… And then you’ll get a call that’s says “well, turns out that 1% happened”

If they’re buying it out, they already know if the disposition fee is happening or not. So they either haven’t figure out if they’re actually buying it yet (maybe the equity is marginal and they want to see what they get for it) or something else is going on.

18

Why don’t you call the captive and if they don’t waive it, let them bill you.

19

Do not pay it upfront. Something is very fishy with this. Just have the captive bill you later if there is a dispo fee.
I think the dealer is just trying to keep that money and say it is a dispo fee.
Getting some refund makes this extremely complicated. Keep it simple, have them bill the fee if there is one.
The dealer isn’t doing any favors by collecting this fee now.

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20

Yeah that is what im trying for.

21

As others stated, disposition fee is charged to you, not the dealer or buyer. The dealer shouldn’t be charging you or rolling it into any new lease.

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