Leasing a car has become popular as it comes with several benefits. It gives you a chance to drive a newer model car at lower monthly payments as compared to financing. As your car lease approaches its end, you should start preparing for lease-end inspections, fixing damages, and turning-in procedures to ensure everything goes without a hitch. Visit eAutoLease.com to find out how to return a car at the end of a lease and what you can do to avoid paying hefty fines.
Keeping a leased car clean, preventing excessive wear and tear, and staying updated with basic maintenance tasks can help you avoid trouble when you return the leased vehicle to the dealer.
Read these tips and tricks to minimize extra charges and save money at the end of your car lease.
Read more: Can You Lease Your Car to Your Business?
What Happens When the Lease Ends?
There are several things you can do as your car lease term ends.
Turn In Your Car and Lease Another Vehicle
You can turn in your vehicle, and with a little advanced preparation, have your next leased vehicle set up and ready to go. You can just swap cars when the time comes.
You can decide on the conditions of your next car lease with your dealer and financial provider. If you plan to lease the next new vehicle immediately after turning in the current one of the same brand, you may get some excess-use charges waived, like excess miles or dents.
Remember, there is no obligation to take on another lease if you don’t want it. You can purchase a new or used vehicle if it works for you. Also, you don’t have to stay with the same dealer if you were not satisfied. You can walk away after returning your car and get a new or used vehicle from a different dealership or even a private seller.
Extend Your Lease
If you are not ready to turn in your car just yet, you also have the option to extend the lease. Whether you are waiting for the newer model, or you need to hold on to your current vehicle for a few more months, or you are moving out, and your transportation needs will change soon, you can extend your lease.
This is something that lessees do all the time and leasing companies understand. All you need to do to extend your lease is contact the bank and ask for an extension.
Buyout Your Leased Car
If you are comfortable with the vehicle you are driving and don’t want to give it up, you can buy out your lease. The leasing company offers you a way to buy out your car. It can take place either during or at the end of the lease. There is also a buyout clause in your agreement that states the conditions at which you can purchase the vehicle you are currently driving.
The buyout price is defined at the beginning of your lease. If the car is worth more than the buyout price, a buyout may be the right choice. Other factors you should consider to determine if a buyout is a good financial decision include:
- The car’s worth in its current state
- The mechanical history of the vehicle
- Whether you’ll be required to pay extra mileage charges
- Whether you’ll have to spend money on reconditioning or excessive wear and tear
- Whether you are capable of providing financing and making the monthly payments
Read more: Can You Lease a Car With Bad Credit?
Is It Possible to Return Your Car Before the Lease Has Expired?
Even though leasing companies are pretty strict when it comes to upholding contracts, there are other ways to break a lease or return your car before the lease has expired. To prevent losing cash flow from your lease, companies impose harsh penalties if you terminate a lease early, and usually it is more expensive to break a lease than to continue with the payments.
Here are some ways to get out of your lease before the leasing term ends:
Lease Transfer
A lease transfer is the most effective solution if you want to get out of your lease. However, you can only go for a lease transfer in the following circumstances:
- You need to find a person who is willing to carry on your lease with the same terms and conditions.
- The person taking over the lease is ready to accept the car in its current condition.
- The leasing company has run the credit checks on the potential new leaseholder and finds them eligible for the lease transfer.
Each case is different, and the exact terms of the transfer are unique, but you will have to pay an administrative fee that is several hundred dollars. You may also have to pay some kind of compensation or incentive to the new lessor.
You can transfer your lease to someone you know, such as a family member, a friend, or a coworker, or search at online automotive marketplaces to find the right person to take over your lease. Check out if the lease company is willing to completely remove your name from the account once the lease transfer is over. Some leasing companies allow lease transfers but keep your name on the paper and hold you responsible if the new lessor is unable to keep up with the monthly payments.
Lease Buyout and Resell
You may be able to buy out your leased vehicle and resell it depending on the current market conditions and the vehicle price. If you have a buyer willing to write a check to the leasing company for the buyout price, you can transfer the vehicle’s title to the buyer’s name.
Trade-in for Another Vehicle
You also have the option of going to any dealership and checking how much they will pay for your vehicle.
At times your vehicle may value more than what you need to pay for it. Knowing when your vehicle is fetching a good price can help determine the right time to sell it.
Terminating the Lease Early and Paying Fees
The leasing company calculates the residual value of the vehicle and charges you according to depreciation and interest. You may also have to pay an additional termination fee.
It is best to explore and exhaust all other options before terminating the lease before time. It is usually more expensive to end the car lease early than to go till the end.
Read more: Should You Lease Your New Truck?
What Happens at the Lease End?
As your lease comes to an end and you take the car back to the dealership, it is thoroughly inspected and checked for damage and wear and tear. If the report comes out clean, you don’t owe anything to the leasing company. In case of significant damage or wear and tear and such as large dents, scratches or broken lights, etc., the leasing company will charge you for all the reconditioning expenses.
Pre-Inspection
The dealership will schedule a pre-inspection of the leased vehicle 90 to 120 days before the lease end. During this period you have a chance to rectify all problems before you turn in the car. After the inspection, you will receive a list of issues. You will be charged for these issues if they are not fixed by the time you turn in the leased vehicle.
You have at least three months before the lease ends, which gives you ample time to shop around and see if you can get these issues fixed at a cheaper rate than what the dealership is charging.
Final Inspection
The final inspection is just the same as the pre-inspection. The only difference is that it takes place at lease end. The issues highlighted in the pre-inspection are double-checked in the final inspection, and excessive wear and tear will be forwarded to the service department that will quote the cost of repair or replacement.
Fixing problems yourself is cheaper before the final inspection, and you can save some money. Dealerships do not use the cheaper fix as they are more focused on the quality of repair, and you may end up paying a hefty bill.
Wear and Tear
Normal wear and tear are expected and included in the lease cost. However, excess wear and tear may cost you more. Your vehicle is graded according to the wear and tear guidelines set by the leasing companies during pre and final inspections.
Wear and tear guides are usually included in the lease contract at the time of signing, and you can go through them to avoid paying hefty bills at the end. You can also find wear and tear guidelines by manufacturers online and keep them in mind to ensure you keep the leased car in good condition.
Here is a list of what may count as excess wear and tear in a leased vehicle.
Exterior
- Dents larger than 2”
- Scratches larger than 4”
- Window cracks larger than ½”
Interior
- Tears larger than ½”
- Holes larger than ⅛”
- Permanent stains
Wheels and Tires
- Wheel gouges larger than 6”
- Tires with less than ⅛” of thread
- Tires with sidewall damage or plugs
Engine and Drive
- Check engine light is on
- Engine starts rough
- Engine runs rough when not expected
- The maintenance schedule was not completed
Chassis and Structure
- Chassis bent or damaged
- Suspension components in poor condition
Features and Electronics
- Electrical features not working properly
- Missing parts and accessories
What to Do When Returning the Car?
Before taking your leased car on its final drive to the dealership, collect and organize all documents and equipment related to the vehicle. You must have all the original equipment that came with the vehicle, including:
- Full set of keys and fobs
- Original wheels
- Original floor mats
- Cargo covers
- Owner’s manual
- All accessories that came with the vehicle
In case anything is missing, you will be charged a replacement fee. Also, wash the vehicle thoroughly and remove your belongings before heading to the dealership. A dirty vehicle triggers more alarms during the final inspection, leading to additional charges.
Check for Vehicle Mileage
Most leases allow lessees to drive 10, 12, or 15 thousand miles per year which is agreed upon at the start of your lease. You can purchase additional miles before the end of your lease. It is cheaper to add miles before returning the leased car than to get charged for excess mileage.
Other Turn-in Fees and Charges
Most lessees miss the extra charges at the end of the lease as they are more focused on the upfront charges and monthly payments. Financial providers usually include a disposition fee in the lease agreement, which is also called a turn-in fee or an admin fee. This fee is paid for the cleaning, moving, storing, and admin work on the vehicle until it is resold. It amounts to a few hundred dollars.
You may have to pay the turn-in fee regardless of the vehicle’s condition. It can only be avoided if you buy out the car, which puts an end to the lease process and all associated charges.
Knowing what you need to do to prepare for a lease end saves you from spending extra money when you return the car to the dealership. eAutoLease.com provides comprehensive information about how to turn in a car at the end of the lease, and what factors you should keep in mind for handing the vehicle back to the lessor.
