All good things must come to an end, and at some point, you will need to return your lease car to the provider. If you are nearing the end of your current lease contract, you probably have some questions around the vehicle collection, as well as excess mileage and damage charges. This guide looks at what happens when it is time to give your car back, what to do if you have damaged your vehicle, and whether you can return your leased car early.
What happens at the end of a vehicle agreement will vary slightly between different finance companies, but you will usually be contacted by the provider a few months before your lease is due to end. Whether you decide to hand the vehicle back and upgrade to a newer model, extend the lease contract, or purchase the vehicle from the car hire company is your choice, but your options are dependent on the type of contract that you took out at the start of the term.
When it comes to business leasing agreements, there are four possible outcomes: contract hire, contract purchase, finance lease and a lease purchase. At AMT, we specialise in contract hire, where the car is returned to the finance company at the end of the contract, leaving you free to lease a new vehicle. Although we do not offer other finance agreements, it is still important that you understand every contract so that you can choose the agreement that best suits your needs. These are:
For personal leasing contracts, there are three options: personal contract hire, personal contract purchase and personal lease purchase.
If you are reaching the end of your lease contract, it is important that you take the time to properly prepare your car for inspection. The BVRLA advises that you inspect the vehicle for damage at least 10-12 weeks before it is due to be returned to give yourself enough time for any required work to be carried out.
Begin by thoroughly checking the exterior of the vehicle, looking at the roof, bonnet, doors and body for any significant dents or scratches. Examine the mirrors and windows for any chips or cracks, before inspecting the interior for odours or tears in the upholstery. Make sure that the dashboard and all other controls are fully functional, and clear any personal information from the Sat Nav or Bluetooth system before collection.
To have the lease car collected, you will need the registration number, your address and telephone numbers, along with a preferred collection date and any other documentation your leasing company asks for. If you are renewing your lease and have selected a new model, collection and delivery may be able to take place on the same day to ensure a smooth transition between vehicles.
When your vehicle is returned to the finance company, it will be inspected for any damage that failed what is deemed ‘fair wear and tear’ according to BVRLA guidelines. Fair wear and tear refers to the damage that occurs to a vehicle as a result of normal use throughout the lease period, and is not caused by accident, negligent behaviour or poor treatment. For more information, read our guide on wear and tear.
You will be liable to pay for any excess damage that is found outside of fair wear and tear in the form of penalty charges. Excess damage includes everything from accident damage, dents and scratches to missing keys, absent documents or incomplete service history. It is a good idea to take comprehensive photos of the vehicle before collection to ensure you can dispute any possible damage claims with evidence.
Excess mileage charges may occur at the end of a contract if the vehicle has exceeded the mileage allowance agreed at the start of the agreement. These charges vary depending on the manufacturer and model, but generally range from 2p per mile up to 30p.
Depending on the finance company, you may be able to extend your lease contract. However, this is not guaranteed. One of the most common reasons for a driver wanting to extend their contract is because their new car is being delivered a while after their current lease contract ends. They may have ordered a factory car, or taken a while to decide on their next model.
Another reason people ask to extend their lease contracts is because they are not quite ready to part with their vehicle. While this is understandable, extending a three-year contract means you will need to pay for its MOT and may run the risk of your vehicle falling outside of warranty.
Generally, you can extend your lease contract for anything up to 12 months. Some finance companies will have a maximum term that you can extend your lease for, while others will be willing to negotiate based on your personal situation.
In summary, when you return your lease car you will either have to arrange collection with the finance company yourself, or they will contact you in advance to arrange a convenient date. Your car will undergo an inspection and you’ll be subject to penalty fees for any damage that falls outside of fair wear and tear.
If you are a business or individual looking for a new lease vehicle, contact our dedicated team today to discuss your requirements.
