Returning a leased car: How it works and how much it cost

Are you about to return a leased car in the UK but are unsure of the process? Then take a look at what you can expect and whether there might be additional charges if your leased car is damaged.

If you’ve never returned a leased car before, with so many things you need to think about, it can be a little bit of a daunting prospect. But here are a few useful tips on what you can expect so you’re not left unprepared.

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?

The first part we’ll look at is the actual process of returning your leased car – what to expect and how the process works.

When you are coming to the end of your contract (usually around one month before), your lease company should contact you regarding returning your car. You can then agree on a date for the handover to take place. Your next step will be to prepare the car for the exchange to take place.

Obviously, the sooner you can get the car ready for the vehicle inspection, the better. However, if you’re using the car regularly, some of the below can only be done around the actual time of the handover.

Before your car is returned to the lease company, you need to make sure that

• The vehicle is in a safe and roadworthy condition with the relevant sets of keys, equipment and documentation (ie no bald tyres)
• The vehicle is generally tidy – it doesn’t have any personal items left inside
• The vehicle needs to be fairly clean on the outside so that scratches and marks can be seen
• You need to check the car before the inspection and note any damage either inside or out
• You should also have the full-service history of the vehicle ready for inspection

If you have time, it’s probably best to read through your contract’s fine print to ensure there are no nasty surprises.

Handover day

On the day you return your leased car, you should get a call in the morning with an estimated time that the person collecting and inspecting will arrive.

Once the inspector arrives, they will need around 30 minutes to an hour to inspect the vehicle thoroughly. They will usually use a tablet to take photos and complete a report about the vehicle’s condition. Once finished, they will review everything they have found and show you what they submit in their report. They should also let you know the expected costs involved in the repair.

At this point, it’s important to remember that the cost isn’t finalised. It will be sent off to the lease company and they will decide whether you will be charged or not.

The inspector should allow you to comment on whether you think the charges are fair.

Once you have signed the report, it will be sent off to the lease company and you will receive a copy too.

Final invoice

Depending on how efficient your lease company is, you will get their final decision about any extra fees within a couple of weeks, usually through the post. If you agree with it, you don’t have to do anything, as the money will be taken automatically as part of your direct debit.

New vehicle

If you’ve agreed to a new lease to replace your old one, the inspector should arrive with your next car. Occasionally though, it may be delivered on a different date if there are any 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 very well knowing that fair wear and tear is acceptable, but what is it?

Most companies adhere to the rules set out by the British Vehicle Rental & Leasing Association (BVRLA), the official UK body for companies that rent, lease or manage cars and commercial vehicles.

The BVRLA suggests:

Fair wear and tear occurs when normal usage causes deterioration to a vehicle. It is not to be confused with damage which occurs as a result of a specific event or series of events such as impact, inappropriate stowing of items, harsh-treatment, negligent acts or omissions. 

Chips should be no more than 3mm in diameter, dents 15mm and scratches 25mm. Scratches shouldn’t reveal primer or bare metal and there should be no more than four scratches to one panel.

On headlights, scratches must be less than 25mm in diameter. On the windscreen, light scratches are acceptable as long as they don’t interfere with the driver’s line of sight. The tyres must meet the minimum UK requirements and cannot be damaged.

Scuffs up to 25mm on the outside edge of wheel trims and on alloy wheels are acceptable.

Interior upholstery needs to be clean and odourless with no tears, scratches or burns.

There are plenty more details about what is acceptable and what is not 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.

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?

FAQs