Car leasing is a great way to drive the latest models from some of your favourite manufacturers, with flexible terms and costs to suit your budget. But what happens at the end of your lease? You’ll have three options depending on your preferences: Upgrade, return or extend. Learn more about what happens at the end of your lease and how you can save money below with our comprehensive guide.
Options at the end of your lease
When you come to the end of your lease, you’ll have a couple of options to choose from:
Return your car
If you no longer need a vehicle, just hand it back. Your vehicle will be inspected, checked for excess mileage and any damage charges. Once everything is settled, your lease agreement will be complete, and you can walk away.
Upgrade your car
Choose a brand-new car and start a fresh lease. You can choose from a range of new models with the latest technology, for the newest cars at a fraction of the price that comes with buying.
Extend your lease
Some providers let you extend at a lower monthly rate. Choose from short-term extensions that are typically 3-12 months to give you flexibility while deciding what you want to do next.
Steps for returning a car smoothly
Schedule your inspection early: Be sure to schedule your inspection early, 4-6 weeks before your lease comes to an end. Early inspections allow you to address any issues before the final handover date.
Check for fair wear and tear: Make sure you’re aware of your lease provider’s fair wear and tear guidelines to ensure your car is in the best condition, to avoid further charges. Sometimes, smaller issues might be more economical to fix independently.
Stay within your mileage limit: Check how many miles are on your car as the end of your lease term is approaching. Make sure you haven’t exceeded your limit, as this can result in further costs.
Clean the car: Clean your vehicle inside and out. Make sure you’ve removed all personal belongings, and you’re ready to return anything that came with the vehicle, like electric car charging cables.
Gather your documents: Collect all documents related to your car and lease, including the service book and any repair receipts.
Inspection and maintenance requirements
Your leasing provider will inspect the car when you return it to check for any damage that goes beyond Fair Wear & Tear. They will look for:
- Light scratches under 25mm
- Small stone chips
- Minor interior wear
You may be charged for:
- Dents bigger than a 10p coin
- Deep scratches exposing the metal
- Stains, rips, or burns on the interior
It’s often cheaper to fix minor damage yourself before returning the car rather than paying the lease company’s repair costs. Here are a few tips to help avoid additional costs:
- Check your mileage – Make sure you’re within the limit.
- Inspect for damage – If there’s anything beyond fair wear and tear, consider repairs.
- Clean inside and out – A well-presented car makes a better impression.
- Remove personal belongings – Check under seats, glove compartments, and boot spaces.
- Have spare keys and documents ready – This includes your V5C, service history, and leasing paperwork.
Typical fees and how to avoid surprises
Understandably, when you hand your car back to your lease provider, you’ll want to try and avoid additional fees wherever you can. Some of the typical fees that you should expect include:
Excess mileage charges: This is one of the most common fees when it comes to car leasing. If you exceed your mileage allowance, you will be charged for it, which is typically worked out per mile. To avoid this, make sure you keep checking how many miles you have left throughout your lease deal.
Missing equipment and documentation: You’ll need to make sure you have everything that came with the car, including 2 sets of keys and the car’s handbook, as well as any documentation about your lease. To avoid additional charges, keep these items in a safe place so you know exactly where they are when you need them.
Early termination fees: If you want to hand your car back before your term ends, you’ll need to pay an early termination fee. This tends to be 50% or more of the remaining rental. To avoid these costs, make sure you choose a lease term that works for you, and ensure you know exactly how long you have left.
Maintenance and servicing costs: If you’ve chosen a maintenance deal, you’ll need to make sure all scheduled services have been completed. If not, you can be charged for not keeping up with maintenance throughout your lease term, especially if it has had an impact on the car’s condition.
Tips to get the best value from end-of-lease decisions
We all want to get the best deal possible when our lease term comes to an end, for money in your pocket and a lease that suits you. Here are a few tips to help you get the best value:
Plan ahead: Review your options 2-3 months before your term officially comes to an end. This gives you time to explore your options, compare quotes, and minimise any gap between cars. Planning early also means you can avoid unnecessary admin fees.
Condition and mileage: Weigh up whether your car needs to be repaired or if it’s fine to be returned the way it is. Check your mileage allowance to avoid further costs.
Compare your options: Start comparing your end-of-term options early to give yourself enough time to make a decision. Which works best for your lifestyle and which will save you the most money? If you’re happy to keep your car, extending rather than choosing a new car might be a more affordable option.
Ask about incentives: Some lease providers have incentives for existing leasing customers, so be sure to ask whether this is something you can take advantage of.
Time your lease strategically: Plan for delivery lead times. New cars may take longer to get to you, so contact your provider a few months before the end of your lease to save yourself from needing a costly short-term extension.
Check for fees: Check for end-of-lease fees. This could be anything from admin fees to early termination charges. Make sure you’re aware of all costs so you can save money.
Think about your next car: Compare the cost of any potential new lease models to how much you pay for your current car. Think about fuel efficiency, insurance, tax and maintenance costs.
The end of your lease term doesn’t have to be difficult. Save money and drive the car of your dreams with the above tips from Car Leasing Made Simple.