Returning a Leased Car in the UK: Costs, Charges and What to Expect

Are you about to return a leased car in the UK and aren’t quite sure what to expect? You’re not alone. The process can feel daunting if you’ve never done it before, especially with all the talk of inspections, damage charges and surprise fees. The good news is that it’s usually straightforward if you know how it works and where people commonly get caught out.

I’ve been through the process myself, been hit with charges I didn’t agree with, and successfully challenged them. Below is everything you need to know so you’re not walking into it blind.

Returning a leased car early

The first thing you need to consider is whether your car has come to the end of the lease contract. If not, you will be charged an early termination fee. How much this depends on your agreement, but usually, it means paying up the rest of your contract in full. So, if you have ten months left to run and your monthly payments are £200, it will cost you £2,000. If unsure and can’t find the details in your paperwork, give your lease company a ring.

Now that’s out of the way, what can you expect?

What happens when returning your leased car?

Around a month before your contract ends, the lease company should contact you to arrange collection. You’ll agree a handover date and then prepare the car for inspection.

Before the car is collected, make sure:
The vehicle is safe and roadworthy, with legal tyres and all keys present
The interior is empty and reasonably clean
The exterior is clean enough for scratches and dents to be visible
You’ve checked the car and noted any damage inside or out
Servicing has been carried out as required

Most modern cars now use digital service records, so don’t panic if you don’t have a stamped service book. As long as servicing has been done on time and logged electronically (usually through the manufacturer network), that’s fine. Missed or late services, however, can still result in charges.

If you’ve got the time, read your contract properly. Most disputes come from things that were technically in the paperwork all along.

Also worth reading
Are you in the market for a new car? Take a look at some of the best used car websites in the UK.

Handover day

On the day of collection, the inspector will usually call with an estimated arrival time. Once they arrive, expect the inspection to take around 30–60 minutes.

They’ll photograph the vehicle, log any damage on a tablet, and produce a condition report. Once finished, they’ll talk you through what they’ve found and give an indication of potential costs.

This part is important: the costs discussed are not final. The report is sent back to the lease company, who decide whether charges apply. You should be given the chance to comment on the report before signing it. If something feels harsh, say so and make sure it’s noted.

You’ll receive a copy of the report once it’s submitted.

Final invoice

If there are charges, you’ll normally hear within a couple of weeks, usually by post or email. If you agree with the charges, you don’t need to do anything. The money will be taken by direct debit.

Do not cancel your direct debit until all disputes are resolved. However, once the final invoice is settled, cancel it immediately. This avoids delays with refunds or the risk of further payments being taken.

New vehicle

If you’ve arranged a replacement lease, the new car often arrives at the same time the old one is collected. Occasionally, it may be delivered on a different day due to supply or transport issues.

Extra costs

So what are the extra charges involved when the car is returned?

Returning a lease car with damage

Like it or not, cars are easily damaged and it’s often not your fault. But lease companies like their cars returned in good condition, otherwise, it could impact the vehicle’s value. And if there’s damage there that they don’t consider fair wear and tear, you can be charged.

What is fair wear and tear?

It’s all Most UK lease companies follow guidelines set by the British Vehicle Rental & Leasing Association (BVRLA). These are guidelines, not law, but they’re what disputes are judged against.

In simple terms, fair wear and tear is light deterioration caused by normal use, not damage caused by impacts, neglect or misuse.

Typical BVRLA limits include:
Stone chips up to 3mm in diameter
Dents up to 15mm
Scratches up to 25mm that do not expose primer or bare metal
No more than four scratches per panel
Light scuffs up to 25mm on alloy wheels
Interior must be clean and odour-free with no burns, tears or stains
Windscreen scratches must not interfere with the driver’s line of sight
Tyres must meet the legal minimum tread depth and be undamaged

If you’re close to these limits, it’s worth checking the full guidance on the BVRLA website.

How much can I expect to pay?

Charges for excessive wear and tear depend on the lease company. But expect to pay around £100 for a touch in & flat/polish and £175 for a repaint of deeper scratches.

Should I get the damage to my lease vehicle repaired?

That really depends. If you think the damage to the car will be regarded as fair wear and tear, then there is no point in arranging repairs before returning your car. However, if you think the damage is a little more serious, it will probably be cheaper for you to arrange a repair rather than leave it to the lease company.

I have used ChipsAway before, who charged £50 to remove a minor scratch – around half the cost the lease company would charge. Although that was a fair few years ago and their prices may have changed since.

Should I dispute the charges?

If you are hit with some fees, then absolutely. If you think the charges for returning your lease car are unfair, dispute it with the company. Of course, this needs to be within reason. If you have decided to carve your initials onto the bonnet, it’s pointless to waste the company’s time by disputing the fees. However, if you think that the damage is only to be expected from the number of miles you have travelled, then dispute away.

They will review your case and let you know the final outcome within a couple of weeks.

Mileage

Another potential extra cost of having a lease car is excess mileage – the more miles you drive, the less the car is worth. Most lease car contracts have mileage limits; if you exceed the mileage limit, you will have to pay an excess. How much this is will depend on what your agreement says. An average cost is around 5 pence per mile, but check your paperwork to be certain.

Doing fewer than your agreed miles could work to your advantage though. If there are some scratches or dents to your car that the lease company wants to charge you for, you could argue that the car’s value is worth more because of its lower mileage. Whether they accept that and waive the charges is another matter.

Returning a lease car late

If, for some reason, you’re not able to return the vehicle at the end of a car lease, you could be liable for late fees. But most car lease companies are fairly flexible and as long as you let them know, may continue to charge you the monthly lease payment until it is returned. Just look for a phone number on your agreement and call them to let them know.

My lease car return damage costs

My car was a Hyundai i30 that I found through HotUKDeals. The car I had been driving previously was almost 15 years old and needed a lot of work and the Hyundai was available for £170 per month. That included breakdown cover, tax and was covered by a warranty. Plus, it was far more economical for fuel. That meant I more-or-less knew how much my car would cost each month without any nasty extras.

When I returned the Hyundai, I tried to keep it in the best condition I could. However, it still managed to pick up some minor scratches and a chip to the bonnet… Although I would like to see anybody drive over 8,000 miles without any damage.

The inspector arrived, spent around 45 minutes looking around the car, and then hit me with bad news. According to the guidelines and his findings, three marks needed fixing, which would cost me £450.

Although I admit the marks were there, it still felt slightly harsh. I signed the document though, and added a note that I felt the charges were harsh.

Two weeks later, I received confirmation from the lease company of the charges.

Still feeling a little aggrieved, I sent an email asking them to look at the marks again, as I felt they could be classed as fair wear and tear. Below are the images of the damage.

As you can see (or hopefully you can), the marks were all relatively minor. And within a week, I received an email saying they agreed that the charges were unfair and that I owed nothing.

Unfortunately, I hadn’t cancelled my direct debit, so the money left my account, meaning I had to wait for a refund.

But none of the above would put me off leasing a car again. And it goes to show if you don’t ask, you don’t get.

Lease car return checklist (one week before collection)

Clean the car inside and out
Check tyres for legal tread and damage
Photograph all panels, wheels and interior
Confirm servicing is up to date
Gather all keys, cables and accessories
Do not cancel your direct debit yet

If you don’t ask, you don’t get. And that applies perfectly to lease car returns.

One of the costs that come with a lease car is motor insurance. Why not take a look at how to reduce your car insurance costs?

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