Disposition Fee
A lease-end fee, usually $300-$500, that the leasing company charges when you return the car. It is often waived if you lease again from the same brand.
The disposition fee is charged by the leasing company at the end of a lease when you return the car (not when you buy it out). It covers their cost of taking the car back, inspecting it, and selling it at auction. Disposition fees are usually $300-$500 and are non-negotiable on most leases. The fee is waived if you lease another car from the same manufacturer.
01Is the disposition fee negotiable?
Not really, and it is a legitimate charge. It is written into your lease contract on the day you sign, and the leasing company, not the dealer, collects it at turn-in. Arguing about it at lease end rarely goes anywhere, because you already agreed to it.
The time to look at it is before you sign. Find the disposition fee in the lease contract and note the amount, so it does not surprise you three years later.
02How to avoid paying it
There are a few common ways out. If you buy the car at lease end, you are not returning it, so there is no disposition fee, though a purchase option fee may apply instead. If you lease or sometimes buy another car from the same brand through the same lender, the fee is often waived. Loyalty rules differ by lender, so ask the lender directly what qualifies.
Another option is selling or trading the leased car before the lease ends. Some lenders allow third-party buyouts and some do not, and the rules change, so confirm in writing with the leasing company before you shop it to a dealer.
03What else shows up at lease end
The disposition fee is usually not the only bill. Excess mileage charges and excess wear-and-tear charges are separate and often larger. Both are spelled out in your contract.
Get a pre-return inspection if the lender offers one, and keep the report. Fix small items like a curbed wheel or a cracked windshield yourself if it is cheaper than the lender's charge. Take dated photos of the car on the day you hand it in, and ask for a signed turn-in receipt showing the date and odometer reading.
04A worked example
Say your contract lists a $395 disposition fee and you return the car with 2,000 miles over your allowance at $0.25 a mile. Your lease-end bill is $395 plus $500 in mileage, so $895, before any wear charges.
If you instead lease another car from the same brand and the lender waives the fee, you save the $395. Make sure that saving is real, though. A $395 waiver does not help you if the new lease carries a marked-up money factor or an inflated cap cost. Negotiate the new deal on its own terms first.
05Questions buyers ask
Does the dealer keep the disposition fee?
No. It goes to the leasing company to cover inspecting, transporting and reselling the car. The dealer is usually just the drop-off point.
Can a dealer add their own lease-end fee?
Your lease-end costs are set by the lease contract with the lender. If a dealer asks you for an extra fee at turn-in that is not in your contract, ask them to show you where it appears in writing.
Have a dealer quote with this on it? Check it with the free dealer fee checker: every line comes back junk, negotiable or legit, with what it really costs.