What happens at the end of a car lease?
Leasing a car is a popular way to drive a brand-new vehicle without the financial commitment of ownership. However, as the end of your lease approaches, it's essential to understand the options and processes involved. Here's a guide on what happens at the end of a car lease in the UK, helping you navigate the next steps smoothly.
1. Understand the Lease Agreement Terms
Before your lease ends, it's crucial to review your lease contract. This document outlines the terms you agreed to, including:
- Mileage limits: Most leases come with a mileage cap. If you've exceeded this limit, you'll likely incur additional charges, typically charged per mile over the agreed amount.
- Wear and tear policy: Leased cars are expected to be returned in good condition, accounting for "fair wear and tear". Anything beyond this, such as significant scratches, dents, or damaged upholstery, could lead to extra costs.
2. End-of-Lease Notification
A few months before the end of your lease, your finance company will typically send you a reminder. This will outline the next steps and your available options. It’s essential to respond promptly to avoid complications, such as automatic lease extensions.
3. Arrange a Pre-Inspection
Most leasing companies will offer a pre-return inspection, either a few weeks or months before the lease ends. This inspection will assess the car’s condition, including:
- Bodywork: Inspect for scratches, dents, and chips.
- Tyres: Ensure they meet the legal tread depth (1.6mm) and aren’t damaged.
- Interior: Check for tears, burns, or excessive staining on seats and flooring. This gives you a chance to repair any damage that may lead to additional fees. Doing this ahead of time can often save money, as independent repairs are usually cheaper than charges from the leasing company.
4. Returning the Vehicle
When it’s time to return the car, you’ll need to arrange for collection or delivery to the leasing company. The process generally involves:
- Handing over all documents: Ensure you return the V5C (logbook), service history, MOT certificate (if applicable), and all sets of keys.
- Final Inspection: A final inspection will be carried out upon collection or delivery to ensure the car's condition aligns with the terms of the contract.
- Excess Mileage and Damage Charges: If the vehicle has excess mileage or any damage beyond fair wear and tear, you’ll be notified of any fees. These are often charged separately after the final inspection.
5. Your Options at Lease End
At the end of a car lease, you generally have three main options:
a) Lease a new car
If you’ve enjoyed the leasing experience, you may want to lease another vehicle. Many drivers choose this route to continue enjoying the benefits of driving a new car. Often, leasing companies will offer incentives for renewing with them, such as reduced fees or discounted rates on a new lease.
b) Walk away
This is the most straightforward option. Once the car has been inspected and any outstanding charges have been settled, the contract is concluded, and you are free to walk away. If you don’t need a new car immediately, this could be a suitable option.
c) Extend your current lease
If you're still enjoying your current lease or unsure what to do next, you can look at a contract extension. Many dealers and finance companies will allow you to extend on a month-by-month extension.
6. Dealing with Outstanding Costs
Once your lease ends, any outstanding charges must be settled promptly. These may include:
- Excess mileage charges
- Damage repair costs
- Late fees: If the car is returned late, you may be subject to extra charges.
Ensure you have cleared any fees before moving forward with a new lease or purchase.
Reaching the end of a car lease is a straightforward process when you understand the terms and prepare for the vehicle’s return. Ensuring the car is in good condition and addressing any potential charges ahead of time will make the handover smooth and stress-free. Whether you choose to walk away, lease a new car, or buy your current vehicle, knowing your options helps you make an informed decision.
Leasing offers flexibility and convenience, and with careful planning, the end-of-lease process can be just as hassle-free as the driving experience itself.
Step One |
Arrange Collection
Arrange the collection of your vehicle. Usually, a company such as BCA will be in touch to arrange a collection date of your vehicle. Here they will come and inspect the vehicle.
Step Two |
Inspection
After an inspection has been arranged, a inspector will visit your address to go over the vehicle. They will any significant damage, such as scratches, dents and other marks that fall outside of general wear and tear.
Step Three |
Report
After the inspection, the collection agent will provide you with a report. This will highlight any notes and comments made regarding the condition of the vehicle.
Step Four |
Collection
Once the paperwork has been signed and the condition of the vehicle has been recorded, the vehicle will be taken away. A further inspection may happen as per the BVRLA Guidelines.
Step Five |
Invoiced Raised
Should there be any outstanding damage on the vehicle that needs rectifying outside of the BVRLA's Fair Wear and Tear Guide, an invoice will be raised. This will include any excess mileage charges that will require being paid in full.
Step Six |
End of Agreement
That's it. Once the vehicle is driven away and any excess mileage charges are settled, the contract will end. The finance company will typically send you some paperwork confirming the end of your contract and no further payments will be taken.
Existing Customer Information
Are you an existing customer of Britannia Car Leasing and looking at your next options and what to do with your current lease? Well, we have you covered. We have a department dedicated to figuring out your circumstances and requirements with your next vehicle. Get in touch with our renewals department today to find out how we can help you save money on your next agreement.