How to Return a Car at the End of a Lease

  1. Research Center
  2. /
  3. Car Leasing Research Articles
  4. /
  5. How to Return a Car at the End of a Lease
tourist photographing sea view with smart phone
Decisions… decisions…
Having enjoyed several years with your lease car, the time comes when your contract runs out. Will you simply return the lease car to your dealer and get a new vehicle? Can you use your lease car as a trade-in for an auto purchase? Can you return the car to another location? Would you rather extend the lease on the car? What if you've fallen in love with your lease car and want to buy it?
When your auto lease runs out, you have options. Let's take a look at how to return a car at the end of a lease.

Your Lease is coming to an end

Usually, about 90 days before your auto lease comes to an end, the leasing company or car dealership where you got the car will send you a notice and information about how to turn in your car. This includes procedures for the lease-end inspection and returning the vehicle.
When you signed the lease agreement, there were many details regarding fees that would be collected at the end of the lease. These include charges for excessive wear and tear, mileage overage fees, and an administration or disposition fee for restocking the vehicle. Naturally, you'll want to minimize any fees you have to pay when returning the car, so Lithia Motors has provided you with a few tips to save you time and money when you return your lease vehicle.

End of Lease Options

Many who lease a car simply return it at the end of the lease term and get a new car. With a little preparation, you can have your next vehicle all lined up and ready for delivery when you drop off your old car at the dealership. The specifics of your next car lease involves a proposition between your bank (or lender), your car dealership, and yourself. If you are trading in one lease car for another new lease, you can often get the lease company to work with you regarding such end-of-lease expenses as excess mileage fees (which can be sizable) and wear and tear charges due to minor dents and dings.
Remember that you have options when returning your lease vehicle. You don't have to get into another lease. You can purchase a new, used, or certified pre-owned car from the dealer. You can also turn in your lease car at any dealership that takes your brand of auto.
You Have Options
  • Perhaps you want to buy a vehicle you found at another dealership. You can trade-in for another car. Check with the dealership to find out how much they are willing to pay for your lease car. If the trade-in value is close to the buyout price, the dealer can buy out your lease car from the leasing company.
  • Maybe you're holding out for a new model of vehicle that is coming out next year. Even if your lease is expiring, you can work out a deal to extend your lease on your current car. Contact your local Lithia Auto dealer and talk to them about a lease extension.
  • Not ready to see your leased car go? You can buy out your car. Leasing companies offer the option for you to purchase the car you've been leasing. A buyout can happen during a lease or at the end of the contract. Check your lease agreement for a buyout clause and be sure to read all the fine print.
The buyout price is determined at the start of the lease and the current market value on the car may have changed. Plus, excess mileage and excessive wear on the vehicle may result in major lease-end charges, but if you buy the car, you avoid those charges.

Final Inspection Process
When the time comes to turn in your lease car, a final inspection will determine what you owe the lease company for excessive wear and tear to the vehicle. The dealership service department or auto body department will give you a quote to repair all items revealed in the final inspection. Normal wear and tear is expected and even built into the price of the lease. Your vehicle will be graded according to wear and tear guidelines that are set by the leasing company. You'll find these in the lease contract or can request them from the leasing company.

  • The guidelines for wear and tear usually include exterior scratches larger than four inches, dents larger than two inches and window cracks larger than a half inch. Inside the car, excessive wear and tear is considered tears in the upholstery that are larger than a half inch, holes in the upholstery that are bigger than an eight inch, and any permanent stains.
  • When it comes to the engine components, the guidelines look to see if the check engine light is on and runs an OBD-II code check for faults, listens to see if the engine starts or runs rough, and checks to make sure you followed the recommended maintenance schedule for service.
  • The inspection will look for missing parts and accessories as well as any electrical features that are not working properly. Even the tires are inspected to see if the tread is less than an eighth of an inch or to see if there are any major gouges to the tires or damage to the sidewalls.

Turn-in Charges
When you are first getting a new lease car and signing the contract, the last thing on your mind are the charges you will have to pay when you return the vehicle several years later. You're more interested in what your monthly lease payments will be and how much money you have to come up with to get into the vehicle. For that reason, right now is a good time to get out your lease agreement and go over all the turn-in fees and charges, including those for extra mileage, and administration fees.

  • All lease contracts include a cap on the number of miles you can drive per year. That can be anywhere from 10,000 to 15,000 miles per year. If you drive more than the capped limit, you'll end up paying at least $0.15 per extra mile and that can add up fast. Going over your mileage limit will cost you $1,500 for every 1,000 miles you drive over the limit.
  • The leasing company has a mileage cap because driving extra miles affects the car's residual value. Check your contract to see what your mileage cap is and check the clause for purchasing extra miles well before the end of the lease. It is way cheaper to add extra miles before you return the car than to pay the excess mileage fees!
  • All lease agreements also have an administration fee that is charged to cover the costs or returning the vehicle to the fleet and preparing it for lease or sale. This is also called the disposition fee and it includes cleaning, maintenance, moving, and storing the vehicle as well as administrative fees to handle all the paperwork and tracking that is involved in the process.

The disposition fee can cost you several hundred dollars even if the vehicle is in perfect shape. The only way to get out of paying all end-of-lease charges is to purchase the car through a buyout at the end of the lease.

Let Lithia Help
Whether you are looking to lease a new vehicle, buy a new or used car, truck, or SUV, or return your present lease vehicle, let Lithia Motors help with all your personal transportation needs. If you've got questions, we've got answers. Find your local Lithia Auto Dealer right here.