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Leasing vs. Buying

Disposition Fee

Leasing Buying
You may have to pay a disposition fee if you return the vehicle at lease-end.
There is no disposition fee.
Lease-end disposition fee. If you return the vehicle, you may be charged a disposition, or disposal, fee to defray the lessorís expenses of preparing and selling the vehicle. These expenses may include vehicle cleaning and reconditioning costs, vehicle inspection fees, transportation costs, storage fees, auction fees, administrative costs, and funding costs until the vehicle is finally sold. No end-of-term disposition fee. When you finance the purchase of a vehicle, you do not have to pay a disposition fee at the end of your finance agreement (because you do not return the vehicle).
Reasons for disposition fee. Most lessors charge a disposition fee to defray the cost of reconditioning and selling the vehicle at the end of the lease (either scheduled or early termination) if the vehicle is returned. The fee usually recoups only a portion of the expenses the lessor incurs for vehicle inspection, transportation, storage, reconditioning, auction fees, administrative costs, and funding costs until the vehicle is sold. Potential sale costs. If you want to sell the vehicle and get the best price, you may have to advertise it for sale. If you have not finished paying for the vehicle, you will have to continue to make payments while you are trying to sell it. If you own the vehicle and decide to sell or trade it, you may choose to recondition the vehicle to get a better resale or trade-in price. You pay any costs involved in reconditioning and selling the vehicle.

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Last update: May 5, 2003