All-In Cost

  

Categories: Banking, Tax, Accounting

On the surface, "all-in cost" represents a rather straightforward concept: the total cost of a transaction. The purchase price. The commission. The closing costs. The whole freakin' shark. But it begs the question: Why does it need the "all-in" part at all?

"All-in" becomes a necessary distinction because the process of discovering the total cost of a transaction can sometimes get extremely murky. Often times, transactions will have a stated cost, but then the full amount you have to pay starts snowballing with a series of fees, taxes and add-ons.

Think about your cell phone bill. It might be advertised as $79 a month, but by the time the bill comes, they want you to pay $118.73. Meanwhile, your bill outlines a litany of confusing charges that the clueless customer service rep is unable or unwilling to explain, and the call center manager seems much more concerned about YOUR attitude and tone of voice and significantly less interested in his company's duplicitous charge-mongering. (This may or may not be based on real events.)

Anyway, the all-in figure eliminates this problem by providing a complete accounting of the cash outlay necessary for a particular transaction. Like how gasoline prices include taxes in the advertised price. The amount you pay is the stated amount times the number of gallons - no additional charges are added on later.

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