Administration Fee

Roman Danaev

25 May 2023

Meaning and Definition

An administration fee is a charge or fee imposed by a lender or finance provider to cover administrative costs associated with processing a car finance application or managing the finance agreement. It is a separate fee from the interest charged on the loan and is typically a one-time payment.

Why it is important to know

Understanding administration fees is important for borrowers considering car finance as it helps them be aware of the additional costs associated with obtaining and managing the finance agreement. These fees can vary among lenders, so borrowers should carefully review the terms and conditions to understand the specific administration fee and factor it into their overall budget and loan affordability.

Example

A car finance provider may charge an administration fee of £150 for processing the loan application and setting up the finance agreement. This fee covers the administrative costs involved in assessing the application, verifying documentation, and preparing the necessary paperwork.

Car finance calculator

Must be between £3,000 to £50,000
Must be between £100 to £10,000 and difference between borrow and deposit must be £5,000
24month
36month
48month
60month

These estimates are subject to credit checks and may change when you apply for finance. this is for example purposes only

Hire Purchase (HP)
APR 9.9%

60 monthly payments of

£0


Interest rate
9.9% APR
Amount of interest
£0
Total payment
£0
Personal Contract Purchase (PCP)
APR 9.9%

60 monthly payments of

£0


Optional final payment
£0
Interest rate
9.9% APR
Amount of interest
£0
Total payment
£0