How To Return A Car At The End Of A Lease (Complete Guide)

Passing car keys. Cropped closeup of a car dealer holding out car keys to the camera copyspace car dealership salon manager salesman selling buying giving owner profession purchase vehicle concept.

As your lease approaches its end, you need to start preparing for the lease-end inspections and turn-in procedures.

Typically, your dealer or leasing company will send you information about the turn-in process 90 – 120 days before your lease expires. All you need to do is follow the outlined steps.

However, if you’re new to leasing, this process may be daunting.

  • Should you call the dealer, or the leasing company?
  • What paperwork do you need to complete?
  • Will there be a waiting period to get your next leased car?
  • How will you commute in the meantime?

Finally, your car will be inspected and there may be extra charges if its condition doesn’t match the expectations.

If you’ve already gone through a round of excess-use charges you’ll know they’re often overpriced and not always fair.

Savvy leaseholders take precautions to minimize extra charges. This guide contains practical tips and tricks to help you save money at the end of your car lease.

What Are Your Options at the End of Your Lease?

dealer salesman giving car key to new owner. client signing insurance document or rental car lease form

1. Turn in Your Car and Lease Another One

The most obvious course of action is to return your leased vehicle. With some advanced preparation, you can have your next leased vehicle set up and ready to go. Then, you can just swap the cars on your visit.

The conditions of your next car lease are decided between you, your dealer, and your financial provider. Provided you lease your next new vehicle immediately, you can often get some excess-use charges waived, like excess mileage or dents.

But you’re not forced to take on another lease. Perhaps you’ve decided that you want to purchase a used or new vehicle.

You don’t have to stay with the same dealer either. You can just walk away and get a new (or used) car from a different dealership or a private seller.

2. Extend Your Lease

Even though your lease is expiring, you may not be ready to turn in your car just yet.

Perhaps, you’re waiting for a new model to become available and you need to hold on to your current vehicle for a few more months.

Or, you’re moving and your transportation needs will change in the near future. Maybe you’ve accepted a new job in NYC, where owning a vehicle is difficult and often taking the subway is faster.

Whatever the reason, you can extend your lease. Simply contact your dealership and ask for a lease extension. Most of the time, you can work out a fair deal.

3. Buyout Your Car

Well, what if you like your car too much, and you don’t want to give it up at all?

The leasing company offers a way to buy out your car. A buyout can happen during or at the end of the lease. If you look at your lease agreement, there is probably a buyout clause setting the conditions at which you can purchase your vehicle.

A buyout may or may not be a good financial decision. Consider the following factors:

  • The buyout price is defined at the beginning of your lease. The current market price is formed in real-time. These two figures can differ dramatically.
  • Excess miles and/or excessive wear result in substantial charges at lease-end. If you purchase your leased vehicle, you avoid these charges.
  • If you’re not paying cash, total cost is dictated by the terms of your finance provider.

What If You Want to Return Your Car Before Your Lease Has Expired?

Leasing companies are pretty strict when it comes to upholding contracts. They don’t want to lose the cash flow from your lease, so they impose harsh penalties if you terminate it early.

Pen and car key on top of a lease contract ready to be signed

There are other ways to break a lease, however, as a rule of thumb, it’s always more expensive to end your lease early than to continue your lease payments.

Here are some ways you can get out of your car before lease-end:

Lease Transfer

If you’re looking for a way out of your lease, the most effective solution is a lease transfer.

However, several things need to happen before that’s possible:

  • You need to find a person willing to carry on your lease with the exact same terms and conditions.
  • The person taking over your lease has to accept the condition of the car as is.
  • The leasing company must run credit checks on the potential new leaseholder to ensure they are eligible for the lease transfer.

The exact terms of the transfer are unique for each case, but you can expect to pay an administrative fee reaching several hundred dollars.

Most of the time, when someone takes over your lease, you’ll pay some compensation. Here are some websites where you can transfer your lease to another person:

  • Swapalease.com
  • Leasetrader.com
  • Leasequit.com

Finally, you should always check if the leasing company completely removes your name from the account after the transfer is complete. In some cases you may remain liable as guarantor and held responsible if payments are not made.

Buyout and Resell

Depending on the current market conditions, your vehicle may be worth close to its buyout price.

Young man signing some documents, buying or renting a car in the modern showroom of the car dealership

If you find a suitable buyer, they can write a check to the leasing company for the buyout price, and then you can transfer the vehicle’s title.

Trade-in for Another Vehicle

Similarly, you can go to any dealership and check what they are willing to pay for your vehicle. If the trade-in value is close to the buyout price, the dealership can buy out the car from the leasing company.

On some occasions, your vehicle may be worth more than what you need to pay for it. Staying on top of the value of the vehicle helps you decide if it’s a good time to sell, which can put some extra cash in your pocket.

Most of the time though, you will be lucky to break even.

Terminate Your Lease Early and Pay the Fees

Usually, the worst thing to do is terminate your contract with the leasing company.

The company or dealership will calculate the residual value of the vehicle and charge you according to depreciation and interest. You may also have an additional early termination fee.

Try exhausting all other options before terminating your lease early. It is often more expensive to end your car lease early than to see it through.

End of the Lease Inspection Process

Before returning your car to the dealership at lease-end, it is thoroughly inspected to verify its condition.

Depending on how well you cared for the vehicle, the report may come out clean, meaning you don’t owe anything.

However, if the vehicle is damaged significantly (think large dents, scratches, dashboard lights, etc), the leasing company will have to recondition it for sale. You will be charged for all the reconditioning expenses.

Pre-Inspection

Dealers are always happy to receive clean, well-maintained vehicles. So, they give you the chance to rectify all problems before you turn in the car. This is called the pre-inspection.

The dealership will contact you to schedule your pre-inspection 90 – 120 days before your scheduled lease-end. The inspector usually visits you at your home or office, to make it more convenient.

After the inspection, you’ll receive a list of issues. You’ll be charged for these issues if they’re not fixed by the time you turn in your leased vehicle.

With at least 3 months before the end of your lease, you have plenty of time to shop around and see if you can get the issues fixed at a cheaper rate than what the dealership is charging.

dealer salesman giving car key to new owner. client signing insurance document or rental car lease form

For example, a number of scratches, smudges, and chipped paint can be removed or concealed with proper detailing. However, dealerships can choose to repaint the whole body panel, which is considerably more expensive.

Final Inspection

The final inspection is exactly the same as the pre-inspection, except it happens at lease-end.

Items highlighted in the pre-inspection will be double-checked in the final inspection. Anything considered excess wear and tear will be forwarded to the service department, which will quote the cost of repair or replacement.

For the majority of cases, it’s cheaper to fix problems with a third party before the final inspection, rather than get charged by the dealership. Since you have to pay, dealerships don’t necessarily use the cheapest fix; they’re much more focused on the quality of repair, which can lead to an expensive bill.

Wear and Tear

Normal wear of the vehicle is expected and is built into the price of your lease. Excess wear and tear, however, comes at a cost.

During both inspections, your vehicle is graded according to the wear and tear guidelines set by your leasing company.

Wear and tear guidelines are made available to you, and they’re usually included in the lease contract at the time of signing. If you want to know your guidelines, you can request a copy from the leasing company at any time.

Most manufacturers and leasing companies publish their wear and tear guidelines online. You can find most manufacturers’ leasing guidelines in our post here.

The checklist below is an example of excess wear and tear. Your specific guidelines may differ, so check with your leasing company.

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 drivetrain

  • Check engine light is on
  • Engine starts rough
  • Engine runs rough when not expected
  • 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

How to Return Your Leased Vehicle

 

Beautiful young woman is signing a document and talking to handsome bearded sales manager while buying a new car in dealership

Contact the Dealership to Arrange the Return

It’s best to return the vehicle to the same dealership you got it from. They will be anticipating its return and will be more welcoming.

If the dealer doesn’t reach out to you first, contact them three months before your lease expires and ask them about the turn-in process.

If it’s no longer convenient to return your leased vehicle to the same dealership, you’re free to choose any other who works with your vehicle manufacturer. But, keep in mind that not all dealers will accept your car with open arms. The dealer may not be in a favorable position to acquire your leased vehicle, so they may hold you to stricter standards during the final inspection.

Whichever route you take, make sure to contact the dealership in advance to arrange the return.

Collect and Organize All Documents and Equipment Related to the Vehicle

When you take your leased car on its final drive to the dealership, you need to 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

Missing equipment is charged a replacement fee.

Wash the Vehicle Thoroughly and Remove Your Belongings

It’s important to present the vehicle in its cleanest state. A dirty vehicle triggers more alarms during the final inspection, potentially causing additional charges.

Personal belongings are not accepted with the return. Remove your sunglasses, accessories, and trinkets before you return the vehicle.

Check Vehicle Mileage Against the Lease

Your lease agreement includes a cap for the total miles driven during your tenure. Typically that’s 10, 12, or 15 thousand miles per year; total miles driven was agreed upon at the start of your lease.

Extra miles affect the residual value, and dealerships charge an extra fee for each mile after the mileage cap. Typically, charges are $0.15 per extra mile. That’s $1,500 for every extra 1,000 miles. But check with your leasing company for the exact number!

Usually, you can purchase extra miles before the end of your lease. It’s cheaper to add extra miles before you return your leased car than to get charged for excess mileage.

It’s even cheaper to set the appropriate annual mileage when you agree on the initial lease terms. So, consider this next time you lease a vehicle.

Other Turn-In Fees and Charges

When signing the lease, focus is usually placed on the upfront charges and monthly payments. Which is why it’s easy to miss the extra charges at the end of the lease.

Usually, financial providers include a disposition fee in the lease agreement. This can also be called a turn-in fee or an admin fee. The purpose of this admin fee is to pay for the cleaning, moving, storing and admin work on the vehicle until it is resold. It typically amounts to a couple of hundred dollars.

You have to pay the turn-in fee regardless of the vehicle’s condition. The only way to avoid it is by doing a car buyout, which avoids the end-of-lease process and all associated charges.

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