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 the vehicle agreement?

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. It’s important that you understand every contract type so that you can choose the agreement that best suits your needs. These are:

  • Contract Purchase: the business has the option to purchase the vehicle at an agreed price once the contract ends, or return it to the provider.
  • Finance Lease: with a finance lease agreement, the balloon payment must be paid and the vehicle is then sold to a third party.
  • Lease Purchase: after a final payment is made, the car stays with you and/or your business.

For personal leasing contracts, there are three options: personal contract hire, personal contract purchase and personal lease purchase.

  • Personal Contract Hire: with personal contract hire, the car is returned to the provider, leaving you free to lease a new car.
  • Personal Contract Purchase: you have the option to purchase the vehicle for an agreed price at the end of the contract, or return it to the provider.
  • Personal Lease Purchase: at the end of the contract, a final payment leaves the car with you.

What happens when a lease vehicle is collected?

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 repair 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.

What happens if I have damaged my lease vehicle?

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 fair wear and tear 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 per mile.

Can you extend your lease contract?

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.

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AMT Specialist Cars Limited is an appointed representative of ITC Compliance Limited which is authorised and regulated by the Financial Conduct Authority (their registration number is 313486). Permitted activities include acting as a credit broker not a lender.

We can introduce you to a limited number of finance providers. We charge a £239.99 arrangement fee for our Consumer Credit services. We do not act as a financial adviser, or fiduciary. We act in our own interest, whichever lender we introduce you to, we will typically receive commission from them based on either a fixed fee or a fixed percentage of the amount you borrow. Any and all commission amounts will be fully disclosed to you as part of your sales journey. You will be required to give your fully informed consent to our receipt of this commission. By doing this, you acknowledge that you understand our role as a credit broker, and that we will receive a financial incentive if you take out a loan from a lender that we introduce you to.

AMT Vehicle Rental Ltd is authorised and regulated by the Financial Conduct Authority: FRN724010. BVRLA Membership No: 1559 | Registered in England and Wales No: 03713753 | VAT Registration Number: GB721712857 | ICO Registration Number: ZA120651. All companies are subsidiaries of AMT Global Investments Ltd - Registered in England and Wales No: 05904790.

Please note: Whilst every effort has been made to ensure the accuracy of the vehicle information and images, some errors may occur. It is important that you do not rely solely on the information, images or prices shown but confirm with AMT regarding any items that may affect your decision to rent, lease or buy a vehicle. All finance applications are subject to status, terms and conditions apply, UK residents only, 18s or over, guarantees may be required. Registered Address: AMT House, 174 Armley Road, Leeds, LS12 2QH, Tel: 0113 387 4240.

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