What is Disposition Fee?

A disposition fee is a charge a leasing company applies when a customer returns a leased vehicle at the end of the term instead of buying it out. It covers the lessor's cost to inspect, recondition, and remarket the returned vehicle. The amount is disclosed in the original lease contract, typically a few hundred dollars, and is often waived if the customer leases or finances another vehicle from the same manufacturer. Canadian F&I managers should flag the disposition fee during the delivery conversation so it is never a surprise at lease end. It is also a natural reason to invite the customer back before their return date, turning a fee conversation into a renewal or upgrade opportunity for the dealership.