Lease Car Return Tips: How to avoid out-of-pocket expenses

By Cam Benty 11/10/2020 4:00pm

Now that your 2- or 3-year contract is about to end, it’s time to think about how you will handle your leased car return. Unlike an outright purchase, a lease is more of a long-term rental where you agree to a specific term for a set monthly payment. The lease limits annual mileage, requires you to maintain the vehicle and return it with no excess wear and tear. Fail on any of these points and it can cost you money when you bring your car back to the dealer. Here are some tips on minimizing those out-of-pocket expenses as well as strategies to leverage the value of your lease car return.

What is acceptable wear and tear?

Most leases provide for acceptable wear and tear. Often the precise items that you’ll either get a pass on or pay for is spelled out in the lease contract. In making this determination, the dealership where you turn in the car will inspect it. Items they will be looking for include the following:

  • Dents and other collision damage
  • Scratches and scrapes longer than three inches
  • Wheel scrapes larger than two inches or longer
  • Windshield cracks or chips larger than a quarter
  • Tire wear that exceeds 1/16th of an inch tread depth.

About dents and scratches

Many dealers allow wear and tear of $500 to $1,000 before they will dock you. Much of that cost will go towards fixing these normal wear-and-tear items as well as detailing the vehicle for resale. Larger scrapes, scratches, and dents are expensive to repair, especially if they involve paint fixes and blending. Some of these repairs could end up costing more than $1,000. So what can you do?

Before your lease car return, it makes sense to take it to a detail or body shop to get an estimate on repairs. Dent-less paint repair technicians can fix dents and dings for a very reasonable cost. If the dent has not broken the paint surface, these folks do magical work restoring most bodywork dents to arrow-straight perfection.

Touch-up paints that will match factory colors exactly can repair scratches that are deeper than just the clear topcoat. How-to videos can help even a novice achieve professional results. You can order these paints by the vehicle model year and paint code, so you know they’re exact.

Glass and wheel fixes

If you have large cracks in your windshield, get ready for an expensive repair, especially if your vehicle has options such as rain-sensing wipers or auto high-beam headlight dimming. But if you have a chip or small “star” in your windshield, there are windshield repair kits that allow you to fill not only the chip but those pesky little cracks that creep out from the impact point. Pro tip: The best time to repair a chip is right after it happens, so jump on them early.

If you scraped your alloy wheels, causing damage you believe is above the lease-allowed threshold, there are repair services that can help repair them and save you money in the long run. To make it that much easier, there are mobile services that will come to you and complete the repair in your driveway.

Tire wear

Most of the time, factory tires will usually last the length of a 2- or 3-year lease. If you’ve leased a certified pre-owned car, the tires could become worn further than is acceptable. Most of the time you won’t need new tires for two reasons:

  • The dealership may have a better replacement price than the local tire store.
  • They may not accept the tires you purchase so the effort is a waste of time and money.

If your tires are worn, take the vehicle to the dealership and ask them to give you a price for replacement. In addition, find out the exact make and size of tires they have in mind. If you think you can beat their price, take it to the local tire store. Make sure the cost that a local tire store quotes includes dismounting and recycling your old tires along with mounting and balancing the new tires. Unless you find out that the local tire store pricing is competitive, the dealership is probably a less stressful choice.

The upside of lease car return

If you take great care of the vehicle and are under the mileage cap, you are in luck. There’s a high demand for late-model, low-mileage used vehicles. As a result, your lease car return may even exceed the original estimate for residual vehicle value. That high value could mean money in your pocket.

You can check how much your car is worth at Kelley Blue Book Car Values. Once you have a figure, contact the dealership leasing office and find out what they’ll do for you. Remember, you don’t have to take your vehicle back to the original dealer. Instead, shop around and use that value to help negotiate your next deal.

Options after your lease car return

In review, at lease turn-in, there are three routes you can take: simply return the vehicle, lease a new one, or purchase a replacement. Here’s what to expect from each:

On a simple return of your vehicle, you’ll have to go through an inspection, often conducted by an independent contractor, pay excessive mileage penalties (charged at usually between 15 to 25 cents per mile, i.e. 10,000 miles over is $2000!), wear-and-tear chargebacks and a disposal fee of about $350. The disposal fee is for restocking the vehicle in dealer inventory and covers the cost of detailing and preparing the car for resale.

If you lease a new vehicle, you won’t need to do an inspection or pay for anything but excess wear and tear as well as excess mileage fees. Typically, the dealer won’t add a disposal charge. With your new lease, you may also be able to negotiate away some of the mileage and wear-and-tear charges.

Opting to buy instead of leasing will also result in the same scenario where the dealer will inspect your lease car return. They should waive the disposal fee as well as any additional charges as part of the new car deal.