Steps involved in returning a leased car

In case you’re wondering when you should start preparing your car to return it, we’ve got you covered. Depending on the leasing company, you will receive prior communication months (2-3 months) before your lease expires. The company makes you aware of your options as well as obligations.

Read on to get a clearer understanding.

Leasing a car can actually save you a bunch on monthly payments but we are not to get carried away because the car is still a lease, you’re just taking care of it and if you fail at that one job, you’ll pay for it dearly.

So let’s first have a look at some of the commonly offered options that you can choose from that best suit your needs and lifestyle:

Early termination

The first option is the early termination option where you return your leased car earlier than the end of lease date. This option can be more expensive depending on the terms of the lease, due to its high early termination fees. Some dealers will require you to pay the outstanding payments remaining on your lease.

Upon signing the lease contract, you agree to keep making payments as per the set schedule until your lease is up. If for one reason or the other you are unable to make these payments, then you can go through the options available for early termination. Cost vary depending on options chosen.

Trade in

The next option is the trade in which is more expensive than if you just lived out your lease. However, you are given the option of recovering some of the remainder costs while you still have some wheels to drive.

To qualify for termination of the original car, you need to get into a new lease with the same dealer. Fees and penalties of early termination roll over to your new lease making your monthly fees shoot up. For ease in payment, these fees can be stretched out throughout an entire term.

Buy leased car

This option is quite common. If you fall in love with your currently leased car and can’t bear the thought of returning it, why not consider buying it? If for example you’re leasing with Scottclarkstoyota, you can own your Toyota in four simple steps:

STEP 1. Determine payoff amount.You can either do this on their account or you can call their offices for guidance.

STEP 2. Get in touch with your originating dealerso that you can review the details on your lease together.

STEP 3. Choose your buyingmethodby deciding whether you will continue making monthly payments or you will pay a lump sum amount.

STEP 4. Make an estimate of your monthly payments.If you choose to pay monthly installments, then you can use an estimator to see how much you would pay.

Returning leased car

If you’re returning your leased car because your lease is coming to an end, then this is the option to go with. But of course if you’re like many of us and have no idea where or how to even start with the whole process, the steps that follow will put your mind at ease.

Note: We have used the scottclarkstoyota steps layout to demonstrate the general steps required for any leasing company.

Step 1:

If you know that your lease is about to be up, get in touch with your dealer 3 or 4 months prior to the end of your lease date. However, if you forget to call, almost all dealers will give you a call so that you can go over the details of your lease agreement together.

Step 2:

Assess the condition of the car using guidelines such as Wear and Tear and mileage allowance. Assessing your car for any damages helps you save cost since you can repair some of the damages to avoid high damage costs at the end of your lease. Excess mileage charges can also be incurred at the end so an overall assessment of the car is important.

Step 3:

Making necessary repairs to the vehicle at your local dealer could actually save on cost. Most local dealers tend to be more cost-effective than if you waited for the inspection and had to pay for the charges incurred upon returning the car. For any repairs done, make sure you keep all the receipts since you could actually take them to your insurance and they’ll cover the cost. Imagine that.

The lease inspection

Most leasing companies charge you for any excessive damages to the vehicle. No, they’re not trying to harass but are ensuring that even after you are done using the vehicle, the next client will enjoy the same service that you did. We say excessive because as per their wear and tear guidelines, there’s a limit as to what is too much wear and tear.

So how do you know how much wear and tear damage is on the car and how much you’re going to pay? This is where the inspection comes into play.

After the first call from the leasing company notifying you of lease end date, they will then call you again to set up an inspection appointment. Independent companies are usually used by the manufacturers to carry out the inspection. No charges are go to you, the lease holder and the inspector comes to you at either your office or home.

The inspection will take approximately 45 minutes and you want to be nice to your inspector. Not that you shouldn’t be nice to everyone else but try and be nice-r.

Offer him/her or water, pick up the parking fee and generally try and make sure that he/she’s comfortable. Your courtesy could go a long way especially if they have leeway when it comes to deciding whether a little damage could pass. But be nice to everyone, every day.

Damages in these areas are what the manufacturers look for:


  • Dents, scratches, scrapes and dings
  • Bumpers and wheels especially curbed wheels
  • Cracks or excess pitting in the windshield and windows
  • Excessive wear on tires


  • Stains on the upholstery that cannot be cleaned using normal refurbishing or tears that can’t be repaired

Inspectors measure the size and depth of all dents and scratches and getting information on any other problems. The information is then entered into a computerized template which gives the estimated cost of repair. You will be given a condition report detailing damages above normal wear and tear and the cost.

Preparing for the inspection

Before the inspection, it is recommended that you remove all personal items from your car and take it for a good wash. The point is to present the car in its best light.

Step 4:

Having completed the inspection, you can schedule an appointment with your dealer to return your car.

Step 5:

Return your clean car to the dealership by end of lease date. You want to return the car to the same dealership that you leased the car with. While you can return the car to any dealership of the same brand, you’ll find that some dealership will be hesitant to pick up another car, so for ease, just return to same dealership.

At this juncture, you are required by law to turn in the complete Odometer Statement.

Remember – Give back everything that you got with the car. For example, the extra set of keys you got upon leasing the car, cargo covers, spare tires, original floor mats and every other item that came with the car.

A final independent inspection will be carried out once you return the car.

Step 6:

Clear any outstanding payments which includes, late fees, property tax as well as any other charges incurred during the lease period.

Upon completion of the independent inspection, charges may be due if your car exceeded the normal wear and tear or mileage allowance. Expect the final statement to be sent to you once the whole process is done.

What charges are due when your lease is up?

Excess wear – The car needs to be returned in top notch condition to avoid extra charges. Consider having your local professional repair any dents and scratches and have the wheels replaced if they have less than 1/8-inch tread. For example, Ford’s wear and use guidelinesstates that any scratches or gouges greater than 6 inches is excess.

Mileage overage

Leases tend to come with a fixed mileage allowance which is normally set for a year. For example, if your lease comes with say a 14,000 miles per year allowance and you lease the car for two years, you should return the car with not more than 28,000 miles so that you can avoid any extra costs.

To estimate how many miles you’ll have by the time your lease is up, divide the current mileage covered by months you have had the car and then multiply the number you get by the number of months on your lease. (This is with the assumption that you are consistent in your driving pattern.)

  • Under-mileage: Should the estimated mileage be under your allowance by the time your lease is over, then you’ll just need to return the car. In the case that you purchased any additional mileage but never used it, you can get a refund. Note however, that you don’t get any credit for this.
  • Over-mileage: Should the estimated mileage be over your allowance, you’ll have three possible options to choose from: a) drive the car less, b) pay the penalty for the extra mileage and c) buy the car at the lease-end date.

Late charges

When you sign a lease agreement, you are required to have the car returned before the set lease end date. If you return the car beyond this date, you will incur extra charges.

Disposition fees

This amount is usually due when you return the car. Depending on the company the fee can range from $200 to $500 although the amount shouldbe specified in the agreement. This fee is used to clean up and repair any damages the vehicle may have, in order to restore it to its original condition for resale. This fee can be waivered if you plan on leasing the car again.

The steps involved in returning a leased car are fairly easy and will mainly require your car and cooperation for the smoothest process. Remember if you’re not ready for your lease to be up, you could contact your dealer and if you fell in love with the wheels then look into the buying option.

Check out their updated video on how to prepare for a lease return:



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