One of the benefits of leasing is handing the car back directly at the end of the lease…
Forget having to sell your car yourself. You won’t need to advertise it privately, negotiate with dealers or be worried about the what the car is worth. Typically you’ll call the finance company and they will organise an inspection. Following an inspection you’ll hand the keys over and your car will be taken to a dealer or a car auction to find it’s new owner.
What happens during the inspection?
Your car will be inspected for damage, the tyres will be checked to ensure they meet the minimum requirements and the car has been serviced according to the manufacturer guidelines.
If your car is damaged then you’ll be charged by the finance company. General wear and tear is covered via the BVRLA and they have some very clear guidelines as to what they consider fair wear and tear which the lease companies adhere to. Anything outside of this will be charged for which might include scratches/dents/curbed alloy wheels/chipped windscreens/missing trim etc. Often it can be cheaper to have this repaired yourself before handing the car back, so long as the repair is carried out to a good standard.
What other costs might I incur?
You will still be responsible for the maintenance of the car. This will involve having the car serviced (generally at a main dealer) at regular intervals and sticking to the manufacturers servicing guidelines. If you take the car to a back street garage who do not use OEM parts or do not have the service carried out at all then you will also be charged at the end of the lease.
Tyres and brakes will also have to be maintained to the required standards set out by the finance company. You’ll need to ensure both tyres and brakes have plenty of life in them at the end of the agreement (generally > 2mm all round for tyres). Some finance companies also require you to return the car with premium brand tyres (no ditch finders thank you!) so this needs to be factored into the cost. For example, VW requires their cars to be returned with premium tyres brands such as Pirelli, Goodyear, Bridgestone, Continental.
Sometimes you may be offered a servicing and maintenance plan which includes your scheduled service and new tyres for a slight increase in the monthly fee. These costs can vary so once again you’ll need to work out if this is a worthwhile deal.
Why am I being charged at all?
Finance companies forecast how much the car should be worth once you hand it back to them. Quite often these cars appear on dealer forecourts or they may go straight to auction. Any damage or lack of maintenance hurts the value of the car so it won’t be worth as much to them or they will have to spend money bringing it back to the required standard. As such, there is an expectation that the car will be looked after and returned in a good condition which enables them to sell the car.
This is true if you bought the car outright, any damage will be reflected in the final sale price. The real difference here is that you will be handed an invoice to pay for the damage rather than having to accept less when you come to sell the car yourself.
Our recommendation is to ensure you enjoy the car but are mindful about the condition and are careful looking after the car. Our aim is to find you the best deals so any damage hits you in the pocket and reduces the overall quality of the deal!