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Alice Poole

Alice Poole

Alice applies her extensive test drive experience and her passion for motors to bring you informed and characterful articles and vehicle reviews.

Read time of 5 minutes.

End of a car lease: all you need to know

There is only one option available to you when you come to the end of your Contract Hire (CH) agreement: you simply hand the car back.

This simplicity is just one of the benefits of car leasing and why many people choose it as their preferred financing option.

It is starkly opposed to the time and hassle involved in selling on a vehicle yourself and involves no car depreciation risk.

Nevertheless, the process at the end of a lease can still be a mystery to many. So, here’s some information to help you out.

1. Do you owe anything at the end of a car lease?

The vehicle will be collected free of charge from your home or work address. And, providing that the mileage limit and standards for fair wear and tear are not exceeded, there will be nothing else to pay.

2. Do you own the car at the end of the lease?

No. At the end of a Contract Hire agreement, you must return the car at the end of your lease.

3. Can I extend my car lease agreement?

It is possible, but not always guaranteed. We’d recommend contacting your funder.

It also won’t be possible to initiate a new lease deal on the car you’re already driving. So, if you’re after a longer term, you’ll most likely need to take out a new lease agreement on a new car.

4. What happens to my deposit at the end of my car lease?

Your deposit or your initial payment is not returned to you at the end of your lease as this formed part of your lease payments.

keys being handed to another hand

5. Handing back a leased car

The first thing to note about returning a leased car is that the organisation funding your lease deal will contact you a few months ahead of the termination of your current lease contract.

You are not expected to make this first contact.

However, you are relied upon to be helpful in arranging to return the lease car when the closure of your lease contract looms.

With months of notice, this process is designed to ensure that a convenient collection is easy to achieve for both parties.

However, if suitable arrangements are not possible before the end of the lease contract or if a collection date is missed, a late fee is likely to apply. This will be outlined in your lease contract.

On collection day, the vehicle will be carefully inspected by a trained assessor.

They will check mileage, exterior and interior damage and any accompanying equipment (such as spare keys) or documentation.

Anything missing or damaged beyond reasonable standards will be chargeable by the funder after they have collected the car.

6. What to do before you return your lease car

There are a few things you can do ahead of the collection of your lease car to make the process run more smoothly:

Read the BVRLA fair wear and tear guide

The BVRLA are a regulating body for all reputable brokers. They set an industry-wide standard that governs the conditions deemed fair for lease cars to be returned in at the end of their contract.

Contrary to popular belief, lease cars are not expected to be returned in showroom condition and these guidelines highlight what damage is considered fair for the vehicle’s age and mileage.

Carefully check your vehicle’s exterior

At least two months before your collection is due, thoroughly check over the exterior of your car for bumps, scrapes and scratches. Anything that exceeds the standards set out in the BVRLA fair wear and tear guide will be chargeable if it isn’t fixed before collection.

Tip: ensure the vehicle is clean and that you are assessing it in dry and well-lit conditions. Assess your vehicle objectively and ask for an alternative opinion to be absolutely sure.

Carefully check your vehicle's interior

As with the exterior of your vehicle, carefully inspecting the interior well ahead of collection will ensure you can fix any issues ahead of time.

Check your upholstery and roof for stains or odours, ensure the dashboard is functional and test all equipment is working appropriately.

Tip: Fixing any damage on your vehicle before collection will be more cost-effective than leaving any repairs unattended.

Ensure the vehicle is thoroughly cleaned

Whether you’re handy with a pressure washer or would rather leave it to the professionals, ensuring your vehicle is sparkling clean, inside and out, leaves no room for errors during its inspection. The funder will send trained examiners to assess the vehicle on collection day and a clean vehicle makes this process easy. It also protects you from any stressful quibbling later down the line for things they could have missed due to dirt or residue.

Empty the car of all personal items

It goes without saying that any personal effects should be removed from the car ahead of collection. Check glove boxes, seat pockets or netting and door bins with extra care! It is unlikely that any missed items, no matter how valuable, will be returnable to you. So a thorough clear out is worth the time and effort.

Arrange your paperwork

Have any original documents at hand, your service history documentation and a valid MOT certificate (if required). You’ll also need all keys for the vehicle that were given to you on delivery.

hand on car bonnet

7. Disputing end of car lease charges

If you do return the car at the end of your lease with vehicle damage, missing items or excess mileage, you’ll most probably be charged by the finance company.

You have the right to dispute any charges with your funder if they are a member of the BVRLA. 

You must mark your objections on the assessor's report before signing it.

You will then need to source an independent engineer to re-examine your lease vehicle.

Their findings will then be final, so if they agree with you, any charges will be refunded in full.

8. Leasing my next car

We recommend considering your new lease vehicle a few months before the end of your current contract. This will not only take into account delivery or build times on your new vehicle, but will give you extra time to find and consider the best deal for you. 

Factory order car lease

If you are hoping to customise your lease car with options, or simply want a vehicle that isn't currently in stock, you will likely need to opt for a factory order vehicle.

A factory order means your car is built from scratch at the manufacturer factory and then transported to the UK. 

The factory order process can take a few months depending on when a build slot can be secured and the availability of the necessary parts. However, build time will be considerably longer when there are supply or transportation delays.

So, if you know you are after a factory order vehicle for your next lease car, make sure you give yourself plenty of breathing space.

Tesla Model Y

In stock lease cars

If you are choosing an in stock vehicle - which means the car is already built and in the UK - the time you need between placing an order and taking delivery of the car can actually be as little as a few weeks.

However, we still recommend starting your search well ahead of time as this gives you the best chance of finding the best lease deal.

Our Customer Retention team will help discuss your preferences and requirements. Knowing this, they can navigate the frequently-changing world of lease car rates and pluck out the most suitable ones for you at the right time.

Rather than be rushed into a deal through fear of being left without a car, more time will allow more informed consideration.