Are you about to return a leased car in the UK but you’re not sure of the process? Then take a look at what you can expect and whether there might be some extra charges if your leased car is damaged.
Hi. My name is Pete and a couple of years ago, I leased a car for the first time. I feel like I have to get that off my chest as I always thought it was a really bad idea. But after a bit of digging, I found out that if you fancied a new car, this could work out as a less expensive way to do it.
As a money saving blogger, I should probably be recommending that people buy cheap runarounds. But if you’re unlucky, you could end up with a real banger that will end up costing you a small fortune.
And there is a saying that you may have heard
If It Appreciates, Buy It. If It Depreciates, Lease It
And there is some good theory behind it too. When buying a car, each month as you make a payment, your car is actually worth less. But there’s probably no point in trying to convince you, as most people reading this will be coming to the end of their lease term.
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 1 month before), your lease company should get in contact with you with regards to 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.
How to get your car ready
Obviously, the sooner you can get the car ready, 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 you 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 keys, equipment and documentation
- 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 prior to the inspection and note any damage either inside or out
- You should also have the full-service history of the vehicle ready for inspection
On the day you return your leased car, you should get a call in the morning with an estimated time that the person that is collecting and inspecting will arrive.
Once the inspector arrives, they will need around 30 minutes to an hour to give the vehicle a thorough inspection. They will usually use a tablet to take photos and complete a report about the vehicle’s condition. Once finished, they will go over everything they have found and show you what they are submitting 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 add comments on whether you think the charges are fair or not.
Once you have signed the report, it will be sent off to the lease company and you will receive a copy too.
Depending on how efficient your lease company is, you will get their final decision about charges 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.
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 decent condition 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 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 damage to my lease car 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. However, if you think the damage is a little more serious, it will probably be much cheaper for you to arrange a repair rather than leaving it to the lease company.
I have used ChipsAway before, who charged £50 to remove a minor scratch – around half the cost that the lease company would charge.
Should I dispute the charges?
If you are hit with some fees, then absolutely. If you think that 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, then 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 then review your case and will let you know the final outcome within a couple of weeks.
Another potential extra cost from having a lease car is excess mileage – the more miles you drive, the less the car is worth. Lease cars have a set number of miles you are allowed to drive each year and if you exceed that, 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 make sure.
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 value of the car is worth more because of its lower mileage. Whether they accept that and waive the charges is another matter.
My lease car return
My car was a Hyundai i30 that I actually found through HotUKDeals. The car that I had been driving 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. That meant I more-or-less knew how much my car would cost each month without any nasty extras.
I had tried to keep the Hyundai in the best condition I could. However, it still managed to pick up some small scratches and a chip to the bonnet… Although I would like to see anybody drive over 8,000 miles without any kind of damage.
The inspector arrived and spent around 45 minutes looking around the car and then hit me with the bad news. According to the guidelines and his findings, there were 3 marks that needed fixing at a cost of £450.
Although I admit that the marks were there, it still felt a little 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 fairly minor. And within a week I received an email to say that they agreed that the charges were unfair and that I owed nothing.
Unfortunately, I hadn’t cancelled my direct debit and so the money had left my account, meaning I had to wait for a refund to be issued.
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 comes with a lease car is motor insurance. Why not take a look at how to reduce your car insurance costs?
What if I am not happy with the charges after returning my lease car?
If you have disputed the charges with the leasing company and you are still not happy, you have the right to refer your complaint to the British Vehicle Rental and Leasing Association. Further details can be obtained from their website https://www.bvrla.co.uk/content/contact-us
Where is my V5?
Not all lease cars providers will send you the V5. If you can’t find yours, then there is a good chance you were never sent one. But if you’re unsure, check with the lease company.
Can I return a leased car early?
You can, but there may be a charge for doing so. If you’re struggling to make payments, you should speak to the lease company to discuss your options. Don’t just cancel your direct debit.
Can I extend my lease contract?
It’s certainly possible, although some companies are more flexible than others. Contact your leasing company to find out more.
Do I need to change the tyres on my lease car?
Only if the tread depth is under the legal minimum (1.6mm).