What is a lease disposition fee?

Once you return your leased vehicle and hand over the keys, you may think that your leasing journey is complete — however, there are important associated fees that you may need to pay upon returning the car. A lease disposition fee (sometimes also referred to as a turn-in fee) is a fee that may be charged at the end of your lease that covers the costs associated with the return. Here’s what lease disposition fees are, and how they factor into the leasing process.

How much is a lease disposition fee?

A lease disposition fee generally runs several hundred dollars or more. The amount may vary depending on the vehicle type, dealer, city, state or county you leased in, or the leasing company. It’s best to refer to your lease agreement, which should disclose the amount of the disposition fee.

What are my end-of-lease options?

At the end of your lease, you may have a few options (depending on the terms of your lease contract). You may generally choose to:

• Buy your current car (if your lease includes a purchase option)
• Turn in your car
• Turn in your car and lease or buy a new one

You can turn in your car and lease another one from the same dealership or you may choose to explore other dealership options. If you love the car, you might decide to purchase it (if your lease includes a purchase option), or you might purchase another car if you aren’t looking for another lease. There are many different lanes to take, each with different financial obligations and fees.

Is there a way to get a lease disposition fee waived?

 There are generally two ways to avoid paying a disposition fee. Two common ways are:

• Buying the car: You may avoid the lease disposition fee if you purchase the car at the end of your lease (if your lease includes a purchase option). If you buy the car at the end of your contract, your leasing company usually won’t charge a disposition fee, as they don’t have to prepare the car for resale. Nevertheless, your leasing company may charge a purchase option fee in connection with purchasing the car. 
• Leasing or buying another vehicle:  If you decide to lease or buy another vehicle of the same brand, the disposition fee under your current lease may be waived as part of a loyalty benefit that may be offered.  Or you may be able to negotiate to have the fee waived.  

Are lease disposition fees a part of early lease buyouts?

If you’re not familiar, an early lease buyout is when you decide to purchase your leased car before the end of your contract. There are other lease-end fees, but there shouldn’t be a lease disposition fee because you will be keeping the car. By keeping the car, the lessor won’t have to prep it for sale at the end of your lease and may waive this fee. Nevertheless, as noted above, your lease contract may require you to pay a purchase option fee.  Always check the terms of your lease contract for details.