Acquisition Cost

Acquisition cost is the total cost required to purchase or lease a vehicle, including its base price and all associated fees needed to put it into service.

This cost typically includes:

• Base price (MSRP): The starting price of the vehicle before options or modifications
• Dealer fees: Charges for documentation, delivery, and preparation
• Upfitting costs: Modifications or equipment added for business use (for example, racks, branding, or specialized tools)
• Taxes and registration: Government fees required to legally operate the vehicle

Acquisition cost is a key input in both fleet planning and vehicle reimbursement programs because it directly influences depreciation and overall ownership costs.

In programs like Fixed and Variable Rate (FAVR), acquisition cost is reflected in the vehicle profile used to calculate reimbursement. Higher acquisition costs generally lead to higher fixed reimbursement amounts, since they increase the cost of owning a vehicle over time.

That’s why acquisition cost plays an important role when comparing vehicles, setting program standards, and making sure reimbursement stays aligned with real-world driving costs.