Disposition fee

What it means

The disposition fee (sometimes called a turn-in fee) covers the leasing company's cost to inspect, transport, recondition, and resell your vehicle after you return it. The fee is written into your lease contract, usually between $300 and $500, and is due at lease end if you do not buy the car or lease another vehicle from the same brand. Some captive lenders waive the fee if you immediately lease a new car through them.

Why it matters

The disposition fee is easy to forget when you sign a lease, but it is a real out-of-pocket cost that adds to your total lease expense. If you have lease-end equity (the car is worth more than the buyout price), the disposition fee can evaporate much of that gain unless you purchase the vehicle outright. Budget for it in advance so you are not surprised by a $400 bill when you drop off the keys, especially if you also face wear-and-tear or mileage charges.

What to do

Find your lease contract and note the exact disposition fee and any waiver conditions. If your lease is ending soon, check whether you have equity by comparing the residual buyout to current used values on our market pulse page. If the math works, buying out the lease avoids the disposition fee and lets you capture the equity by selling the car yourself.