Returning a leased car: Everything you need to know
If you’re coming to the end of your car lease, you may be worried about what happens next. The process for returning a leased car is quite straightforward. Most drivers who have a leased car worry about being charged for small scratches or for going over their mileage limit. Both are valid concerns. Read our comprehensive guide on everything you need to know about returning a leased car at the end of your agreement:
What should you expect at the end of a car lease?
It doesn’t matter how long you’ve had a leased car for, or whether it’s for personal or business use. When the time comes to return it, the dos and don’ts are the same. To begin with, the British Vehicle Rental and Leasing Association (BVRLA) recommends that you thoroughly inspect your leased car at least 10 to 12 weeks before you hand it back to the finance company or dealership. This allows you to make a note of any damage (more on fair wear and tear below) or cause for concern.
If the leased car is in good condition, you’ve paid the full cost of your deal, and you haven’t exceeded your agreed mileage cap, you can simply return it. Having damage and excess mileage means that you’ll have to pay for both when returning the leased car.
Happy with your vehicle? Then you may even choose to renew your lease agreement. However, if you’re looking for change, you can take out a new lease deal on a newer make and model. This will be a new, separate agreement. Remember that you can also search elsewhere, or simply choose to walk away.
You can expect a call from your provider around four months prior to the end of your lease term. They will discuss your options going forwards. Once you have decided what you would like to do at the end of your car lease, the provider will arrange an inspection of the vehicle. This will be followed by an appointment to arrange collection of the car.
How to prepare your car for collection at the end of a lease
Once you have arranged an inspection for your leased car, the provider will usually send somebody to your home. This person will carry out the inspection while the vehicle is parked on the street or in your driveway. There are very few instances where you may be required to take the car to the company’s location.
The whole point of this inspection is to ensure that the leased car will be returned in a condition that corresponds with its age and mileage. If you are worried about damage to the car over the years, just remember that wear and tear is completely normal. Your leased car is not expected to look brand new after a few years on the road. However, it should be clean and adhere to the BVRLA fair wear and tear guidelines – which are used by most providers – if you want to avoid any hefty charges at the end of your lease.
To ensure that your leased car meets the “fair wear and tear” policy, the BVRLA recommends that you conduct the following checks ahead of returning the car to the provider:
- Check your leasing contract and based on the points included, assess the vehicle as honestly as you can. You may want to ask a family member or friend to help you. Ask them to approach with scrutiny and point out any damage that the provider may highlight.
- Assess the car in good light to make sure that you don’t miss any noticeable faults and scratches.
- It’s best to spot damage on a clean car. Make sure the leased vehicle is washed and dried before you inspect it.
- Spend time on EVERY panel of the car. Walk all the way around to examine each part. Remember to check the roof, bonnet, doors, and body for any masked or extensive damage.
- Don’t forget to take a good look at the headlights, lenses, windows and mirrors for chips, cracks and holes.
- Check the tyres, and any spares for damage. On each tyre, inspect the wear on the tread to make sure that it’s even. Examine the wheels closely and check the wheel trims and spokes for any scratches or deterioration.
- It’s important that you clean and valet the inside of the car before returning it. Ensure that there are no tears, stains, burns, or odours on the seats and interior cabin.
- Do a thorough check of the controls, including audio equipment and accessories to make sure they are working.
- READ: Personal Contract Purchase (PCP) vs Hire Purchase (HP_ – which car finance type is best for you?
What is the BVRLA and why is their wear and tear guide important?
The BVRLA is the official UK body for car companies that rent, lease or manage cars and commercial vehicles. The majority of these companies will adhere to the BVRLA’s rules and guidelines, which suggest the following:
- The vehicle is to be returned in a safe and roadworthy condition with the relevant keys, equipment and documentation.
- The vehicle doesn’t have any personal items left in it.
- The person who leased the car has checked the car prior to the inspection, examining both inside and outside for any damage such as stains on the seats, tyre damage or paint damage.
- The person who leased the car has the full service history of the vehicle ready for inspection.
What is Fair Wear and Tear?
Fair Wear and Tear is an industry term and set of rules instructed by the BVRLA. It highlights the conditions in which a leased car should be kept and returned in.
During the car’s inspection, there are certain damages that will be overlooked. These are elements that fall under the BVRLA’s Fair Wear and Tear on a leased vehicle.
Acceptable wear and tear
- Fair wear and tear constitutes a number of damages. The advantage here is that under BVRLA’s Fair Wear and Tear guidelines, there are some common problems that won’t be met with a charge at the end of your leasing agreement.
- Chips: Anything up to 3mm or less in diameter.
- Dents: Anything up to 15mm with no more than two per panel, and none on the roof.
- Scratches and Abrasions: Anything up to 25mm. The scratch shouldn’t reveal primer or bare metal. A maximum of four scratches on one panel is acceptable. Scratches on headlights must be less than 25mm in diameter.
- Light scratches: On the windscreen it’s acceptable provided they don’t interfere with the driver’s line of sight.
- Tyres: The tyres must meet the minimum UK requirements and there must be no damage to the sidewalls or tread (more than 1.6mm).
- Interiors: Upholstery must be clean and odourless with no signs of burns, scratches or tears in the fabric.
Unacceptable wear and tear
Just as there are damages that can be overlooked, the BVRLA’s guidelines also highlight what issues will bring you extra charges at the end of your car lease.
- Before returning your leased car, make sure the vehicle doesn’t have any of these issues to avoid extra charges:
- Rust or corrosion on bodywork or trim of the car.
- Broken paint surface and/or dents larger than 15mm on the roof.
- Scratches and abrasions over 25mm.
- Difference in paintwork colour.
- Rips or tears on the roof or upholstery.
- Chips, cracks or holes in the windscreen or headlights.
- Tyres worn to a tread depth less than 1.6mm.
- Damage to the wheel trim or alloys.
It’s your responsibility to maintain the good condition of your leased car. If you have leased the car with maintenance included, your provider should carry out annual servicing of the vehicle for you. Otherwise, you should take the car to an approved garage for servicing as well as for checking and repairing any damage.
Remember: it usually takes up to four weeks from your inspection date for your provider to inform you of any charges you have incurred as a result of damage. If you get charged for damage to your leased car, but you believe it to be unfair, you can appeal this to the BVRLA.
What happens if I have exceeded my mileage limit?
Besides the physical condition of your leased vehicle, the provider will also check how many miles you’ve done. At the start of your lease, you’ll have agreed on an annual mileage allowance to stick to. However, life is unpredictable and it may be that you had to drive long distances during your lease. As a result, you may have gone over this initial mileage limit.
A lot of the time, drivers wrongly predict how many miles they’ll drive each year. Or it may be that you wanted to bring your fixed monthly cost down so you opted for lower mileage. Whichever it was, it’s a good idea to watch your mileage and adhere to the allowance in order to avoid additional charges at the end of your leasing contract.
Excess mileage costs can vary from anywhere between 3p to 30p per mile. If you know there’s a chance you’ll be doing more miles, it’s worth purchasing extra mileage long before the end of your lease. If your leasing contract does allow for a mileage amendment, your monthly payments will be recalculated. It’s always better to be under the mileage limit at the end of your lease agreement.
- READ: Personal Contract Hire (PCH) vs Hire Purchase (HP) – which type of car finance is best for you?
What happens if I return the leased car late?
You should return the leased vehicle back on the agreed date, and the provider will likely arrange a time to collect the car. In many cases, if you have an emergency and are unable to return the leased car on an agreed date, you should inform your provider at the earliest. Failure to let them know could result in the company repossessing the vehicle by force.
This will likely mean that you are hit with a hefty cost. Furthermore, your credit score will be negatively affected if you keep the car beyond its final payment date. As a result, certain car finance companies may not offer you finance or allow you to lease through them in the future. This can affect your buying or leasing search for your next car, making it difficult and leaving you with limited options and methods of procuring a new car.
If you want to hand your leased car back before the final payment date, you should contact the provider and let them know at least seven to ten days in advance. In some cases, an early settlement fee could be applied and added onto the cost of your final payment.
Arranging collection of a leased car and what to expect
You should arrange a collection for your leased car at least 30 days before the end of your leasing agreement. The provider may contact you before this time to arrange a collection. However, do not rely on the provider to do this on your behalf.
The more proactive you are at the end of your car lease agreement, the better. Even if you’ve not heard from the provider, the best way to avoid failed collection or late charges is to confirm a suitable date and time for returning your leased car. Give the provider seven to 10 working days’ notice when you book your handover slot. This way you will also avoid running over the leasing agreement’s end date.
Make sure that you account for weekends and bank holidays. Also check the provider’s operating hours. Some companies don’t offer return or collection services on weekends or other specific holidays.
What happens on the day of collection?
There’s a checklist of things that you need to be aware of when handing over the keys to your leased car.
A collection agent from an independent company will arrive to check the entire car for any obvious signs of damage. And to ensures that the mileage on the odometer is within the agreed limit. It is imperative that you are present for this check so that you can sign off on what the collection agent has identified and recorded.
If there are any points that you don’t agree with, you can contest the report. In this instance, you’ll have to pay for the evidence to be inspected by a qualified engineer. This person is somebody who is separate from the company and the person who did the original inspection. It is someone who both parties must agree on being involved.
If this person’s decision is in your favour, the car provider will issue a full refund for the examination. However, any disputes that aren’t resolved will be put through to the BVRLA. If you lose any appeals, you won’t be refunded the cost and you won’t be able to appeal again.
Which documents do I need when returning a leased car?
The documents that you will have to keep ready to hand over on the day of collection are:
- Updated service history book.
- Valid MOT certificate (only if the length of your contract requires you to do so).
- Full set of keys and any masters.
Still have questions about leasing? Check out Hippo News for more guides, advice, and information.