Preparation Charges


  • An additional fee that a buyer may be charged purely for the profit of a dealer. Some dealers will attempt to pass the preparation fee onto the buyer even though the dealer has already been paid by the manufacturer for the cost of preparing the vehicle for sale.

dealer preparation charge, dealer preparation fee, preparation fee

Related Terms and Acronyms

  • Destination Charge Definition,
    • A fee charged for transporting a vehicle to the dealer from the manufacturer or port of entry. This charge is passed on to the buyer without any mark-up.
  • Disposition Fee Definition,
    • A fee charged by some lessors at the end of a lease where the customer pays for the privilege of returning the vehicle.
  • Excess Wear Charge Definition,
    • Most leases set limits for wear and tear on the car during the lease term. The lessee must pay charges for exceeding the limits when turning in the car at the end of the lease.
  • Mileage Allowance Definition,
    • The number of miles, specified in a lease, that a car may be driven over the life of the lease.
  • Security Deposit (sec, sec dep) Abbreviation,
    • In automobile leases, sometimes called reconditioning reserve. An amount, often the same as one month's payment, the dealer holds to be sure that the car will be returned in good condition. It is to be returned, less fees and damage charges, at the end of the lease.
  • Up-front Costs Definition,
    • The costs that must be paid at the time of signing a car lease agreement. These can include the first month's payment, a refundable security deposit, a capitalized cost reduction or down payment, taxes, registration and other fees.
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