How to Turn In a Leased Car

How to Return a Leased Car

Many people are caught unprepared at the end of their car lease when they must return their vehicle. What do I need to do? Who do I contact? Where do I turn in the car? Can I return to a different dealer, in a different city, in a different state?

What happens next? Does the lease company contact me? Do I owe money? What if I’m over mileage? Or have unrepaired damages? What choices do I have?

The Lease-End Process

Just to be clear, there is no standard way in which car leasing companies handle the lease-end process. What we describe here is the most common way in which it is done.

Your lease contract will specify the date on which you must return your car. In most cases, your lease finance company will contact you to schedule an inspection, which is typically done by an outside inspection company and can be done at your home or work location. It only takes about 30 minutes.

The inspector will take notes and pictures, specifying any damages, poor repairs, condition of tires, mileage, and any unusual wear-and-tear. He’ll give you a copy of his report to the lease company. Although he might note some minor scratches or damage, it doesn’t necessarily mean the lease company is going to charge you for them.

It is to your advantage to get a pre-return inspection. That way, you have a chance to know about any problems or damages and get them fixed yourself before the return. Be sure to notify the lease company that you have made the repairs. In some cases, they might schedule another inspection.

Since lease payments are paid a month in advance, make sure you don’t make an unnecessary payment later than a month prior to your return date.

You return your vehicle to a dealer who sells the same make vehicle — return a Honda to a Honda dealer — and it doesn’t have to be the same dealer from which you originally leased. In fact, it can be a dealer in another town, or even another state.

Make sure the dealer gives you a signed and dated receipt for the return. In some cases, he may do a quick inspection first. It’s also a good idea to take photographs just in case the car is damaged after you return it.

What Happens Next?

The dealer can do one of two things with your returned car. One, he can buy it from the lease company and put it on his used car lot for sale. In this case, you may or may not ever hear from the lease company regarding your return or any fees you might owe. It bears repeating — there is no standard way in which car leasing companies handle the end of a lease.

The second thing a dealer might do is simply return the car to the lease finance company, or send it to a specified car auction company to be sold. In this case, you can expect to hear from the lease company in a couple of weeks (or more) regarding payment of any disposition fees, or fees for excessive mileage or damages.

How to Prepare for Your Lease Turn-In

If your car has minor scratches and a small dent or two, you probably won’t be charged, but read your lease contract to see what is allowed and what is not. More serious damages should be repaired prior to your turn-in to avoid charges. Generally, you can have the damages repaired less expensively than the lease company’s charges.

If you have excessive mileage, there’s nothing you can do. You agreed in your contract to pay for your excess miles, and you can expect to receive a bill after your return. You cannot negotiate those charges with the lease company or expect them to be waived for any reason, such as agreeing to lease another car from the same company — although a dealer might agree to such an arrangement by paying the fee for you, as long as it is not excessive.

If your tires are worn beyond the limits specified in your contract, you need to replace them with tires of the same quality as the originals, and make sure all tires match. You won’t get by with installing cheap tires that are not of good quality, or that don’t match.

You don’t need to spend much time or money on cleaning up your car prior to turning it in. Simply wash it, clean the inside, and remove any left-over personal items. If you have made modifications, change them back to original configuration.

Alternatives to Returning Your Leased Car

You have a couple of alternative options to turning in your car.

One, you may choose to continue your lease for while longer. Most lease companies will agree to an extended lease of no more than 6 additional months. You must contact the lease company to get approval.

Two, you can purchase your car for the residual value that is stated in your lease contract. This is the portion of the original value of the car that you haven’t already paid during your lease. You may also be charged an additional “purchase option fee”, depending the lease company’s policies. It’s like buying any other used car in that you’ll have to pay cash or get a used car loan. And you’ll pay sales tax (in most states) as well as registration and title fees.

Generally, the lease-end purchase price is not negotiable. The dealer to which you return your car has no authority from the lease company to negotiate.

Can I Return My Leased Car Early?

Yes, but not without cost. Ending a car lease early can be very expensive. It’s much more than simply paying a termination fee. See our article, How to Get Out of a Car Lease, for more details.

However, if you are only within about 3 months of the end of your lease, you could end your lease by returning the car and simply paying for those remaining months. A lease company will not forgive the payments if you return early. Of course, you would still be subject to any lease-end fees, excess mileage fees, or damage charges, as normal. This kind of early turn-in saves you no money.

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