Returning Your Lease Car to the Dealership: How to Prepare and What You Need to Know

It’s been a good few years, but now the end is coming and it’s nearly time to say goodbye. The hours are ticking away towards the conclusion of your lease contract, and you will soon have to return your car.

What can you expect at the end of a car lease period? And what should you do to get the car ready?

Returning a lease car is not always a pleasant experience, since many dealerships and car companies demand all sorts of fees at the end of the contract. If you’re not prepared, you might end up with an unexpected hefty bill.

At Capital Motor Cars, we want to take the stress out of car leasing, including returning the car. That’s why we’ve put together this guide to the end of a car lease, so you know exactly what to do, what to expect and how to move forward.

Bring it back in good condition

When you return your lease car, try to bring it back in as good condition as possible. This is not just a matter of courtesy: the leasing company (“lessor” in technical speak) will charge you for any excess wear and tear on the vehicle.

But what does “excess” mean? A scratch or two are to be expected when you have a car for a few years, right?

Typically, the lessor will contract an independent company to inspect the vehicle and evaluate any damage. They will look for damage in a few categories, measure the size of any scratches and dents, and use a computer program to calculate the cost of repair.

These general categories are:

  • Dents, scratches and scrapes on the exterior
  • Damage to the wheels, especially “curbed” wheels (when the wheel or hub as been rubbed against the curb)
  • Cracks or excessive pitting in the windshield and windows
  • Abnormal wear on the tires
  • Stains or damage to the upholstery that requires full refurbishing, such as cigarette burns

I recommend giving your car a good once-over when the end-of-lease inspection is drawing near. Clean the car and try to make it look its best, repairing any signs of wear and tear that you can. It might be worth it to get a professional detailing job and to replace the tires if they’re worn to less than a 1/8” tread.

Getting this done on your own will always be cheaper than what the leasing company will charge you for it.

If there’s anything that doesn’t work inside the car (radio, navigation system, window or lock system, etc.), get it fixed and keep the receipts.

This said, you don’t have to sweat it over minor stains and small scratches. As long as a scratch passes the “credit card test,” the lessor probably won’t charge you for it. This just means that if the scratch, it’s small enough to look past. Checking your car with a credit card is an easy way to determine if you need to do any detailing work before the inspection.

When you finally return the car, bring it back clean. The dealership will have to clean it thoroughly before marketing it again, so make their job easier and avoid extra cleaning fees for yourself.

It’s also recommended to bring it in with at least a half tank of gas, but this isn’t required.

Beware of sleazy dealers: get the inspection on your own terms

Let me share a word of caution about damage charges and why you should always ask for an inspection from a third party.

Last week I took a trip to LA. It was a great way to escape the Northeast chill and catch up with some old friends who I hadn’t seen for a few years, including a friend I’ll call Karen.

When I told Karen I was working for an auto broker, she raised her eyebrows and started to tell me how she had recently been taken advantage of by an unscrupulous dealership.

She was returning her lease car to the dealership, without yet having had it inspected. Before the dealers began the inspection, one of the sales people approached her and asked if she was getting another car from them.

She said no, not thinking too much of it… Until the dealers came back with a $3,100 bill for minor damages to the car!

receipt for damages

I cringed when I heard this, because tricks like these are sadly very common. If I had spoken to Karen before she returned the car, I would have told her to have the bank send an appraiser to inspect the car. Then she could have returned the car with a clear, objective report on any damages and their costs.

The lesson is to always get the inspection done by an independent company, whether it’s a contractor hired by the leasing company or by the bank that financed your lease. Otherwise, you’re at the mercy of the dealership!

Check your mileage

As I hope you remember from when you signed your lease contract, you are allowed a certain number of miles on a leased vehicle. Drive past the limit and you will be subject to excess mileage fees.

This fees aren’t so much a punishment as simple compensation to the company, since more mileage causes the car to depreciate more and reduces its resale value.

The rate for excess miles depends on the company and the quality of the vehicle. For a cheaper car, it could be around $0.15 per mile over the limit. For a high-end car, it may go up to $0.30/mile.

This may sound like pennies but it adds up fast. Just for some perspective, if you are charged $0.15/mile and you are just 100 miles over, you will pay $15. Or if the rate is $0.20 and you go 250 miles over, you’ll be charged $50.

These numbers aren’t hard to get to over two or three years of driving, if you haven’t been paying attention to your mileage.

It can be hard to keep track of what you’re allowed when you’re only given annual limits or a limit for the entire lease period. Try to break down the annual allowance into a monthly rate. For example:

Annual miles allowed                        Monthly miles allowed

10,000                                                            834

12,000                                                            1,000

15,000                                                            1,250

Of course, if you’re already getting ready to return your lease car, it’s too late to do anything about excess miles. But at least you can know what charges to expect and maybe be more aware next time, or go for a high-mileage lease if you need it.

Move out all your stuff… and bring back the stuff that isn’t yours

This should go without saying, but remember to take all your stuff out of the car before you hand in the keys!

This includes your EZ-Pass, parking sensor and other items that live in the car and can easily be forgotten.

You will also have to return your license plates to the DMV or transfer them to your next vehicle.

Then, make sure you return anything that came with the vehicle. Second sets of keys are commonly forgotten, but the dealership will ask for them back. Also cargo covers, spare tires, the original floor mats and third-row seats, if you removed them and stored them in your garage.

And if you used the spare tire that the car came with, buy a new one to replace it. You can get a donut tire from any tire retailer or even online for as little as $50.

Shop for a new car

Last but definitely not least, when you’re getting close to returning your lease car it’s high time to start looking for a new one.

Does your car company offer a pull-ahead program?

Pull-ahead is a way is an option to turn in your car a few months early and upgrade to a new vehicle from the same company, without incurring early termination fees. This can help you get into a more suitable vehicle sooner, if your needs or tastes have changed, or lower your monthly payments by switching down to a more affordable model.

Do some research into the different benefits and discounts that are available for returning lease customers.

Many companies run loyalty programs, which means if you’ve already bought or leased a car from them, you can qualify for special incentives or discounts on your next vehicle.

On the other hand, some companies also give “conquest cash.” To qualify for these incentives, you have to have previously owned or leased a vehicle from specific competing brands. Yes, it’s a slightly below the belt way for these companies to attract customers away from their competition, but it could work well in your favor!

If you’re happy with the car you’ve been leasing, ask first about what rebates and incentives that brand can offer you.

Conclusion

Returning a car at the end of the lease can be stressful. There are always horror stories about lessees getting hit with crazy fines and unexpected fees.

However, if you’re prepared and you know how the process works, you can avoid the fines or at least the nasty surprise. It always helps if you leased through an agency that provides a high level of customer service.

At Capital Motor Cars, for example, we make it a practice to take the hassle out of returning a lease car. We make the process as simple and transparent as possible for our clients. So when you’re searching for your next lease car, save your future self some trouble and work with a brokerage that offers true white glove service.

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