Acquisition Cost

All promotion costs associated with securing a new subscriber or customer, such as list rental fees, design and production of a direct-mail package, and postage for the package and the reply.

Expense of soliciting and placing new insurance business on a company's books. It includes agent's commissions, underwriting expenses, medical and credit report fees, and marketing support services. Because of competition, significant efforts are made by insurance companies to lower acquisition costs. Traditional captive agent companies have often turned to brokerage as additional distribution or sole distribution channels for this reason.

The price and all fees required to obtain a property.
Example: Abel purchases property for $90,000 plus $5,000 in Closing Costs (attorney's fees, loan fees, Appraisal costs, Title Insurance and loan Discount Points). Abel's acquisition cost is $95,000.