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Lease Return

Lease Return: How Does It Work?

How to Return a Vehicle at the End of a Lease

“Plan Ahead to Avoid Lease Return Charges” – AMG Cars Inc

The Lease Inspection

Most people know that leasing companies charge for any damage to a vehicle that it considers to be more than normal wear and tear. They do this to maximize the vehicle’s value for the next sale by spending as little as possible for reconditioning. But who defines “normal” wear and tear? What damage falls into the “you’re going to have to pay” category? Here is where the inspections come into play.

Although there is some variation in the process, a lease return typically starts about 90 days before the end of the vehicle contract. The leasing company (technically called the “lessor”) will contact you to let you know your lease contract is coming to an end. It will then contact you to set up an appointment for an inspection. Any damage that’s going to cost more than an average amount of money to refurbish is called excessive wear and tear.

Many manufacturers use an independent company to conduct the vehicle inspection, which is free for the lease holder (technically called the “lessee”). The inspector will come to your home or office, and the process takes about 45 minutes. A pro tip: Be nice to the inspector. Is it hot out? Offer some water. Is the inspector doing the job at your workplace? Pick up the cost of parking. Your courtesy could come in handy if the inspector has leeway in deciding whether a bit of damage could pass.

Most manufacturers look for damage in these general categories:

  • Dents, dings, scratches and scrapes on the exterior, bumpers and wheels, especially “curbed” wheels.
  • Cracks, stars or excessive pitting in the windshield and other windows.
  • Abnormal or excessive wear to the tires.
  • Tears or stains on the upholstery that can’t be repaired or cleaned with normal refurbishing.

Inspectors typically measure the size and depth of dents and scratches and enter this information, and other problems, into a computerized template that estimates the cost of repair. At the end of the inspection, or shortly thereafter, you will receive a condition report that lists any damage above the normal wear and tear and what it costs to fix the problem.

Prepare for the Lease Inspection

Most manufacturers’ websites provide specific information about the end-of-lease process and a detailed definition of wear and tear, which also is called “wear and use.” Toyota Financial Services created a lease turn-in site so people can better understand what will happen and see what kinds of damage will incur a charge.

For example, inspectors for Toyota look for any dents or scratches that are bigger than an area that can be covered by a credit card. They don’t charge customers for wheel gouges smaller than an inch or normal tire wear.

Before the inspection, experts recommend removing all personal items and washing the vehicle. You don’t have to spend hundreds of dollars, but a detailing job might also be a good idea. It’s definitely to your advantage to present your car in the best light you can.

Might be the time for some touch-ups

Are there light scratches? Some cut only through the outer layer of paint called the clear coat. A thorough detailing can sometimes eliminate these scratches. If a scratch is deeper, and you are pretty sure the manufacturer will charge you for it, buy a small bottle of touch-up paint from the manufacturer’s parts department. However, the experts suggest using a thin-bristle brush from an art store, not the thicker brush that comes in the touch-up paint bottle.

There also are a number of independent paint-product companies, such as Dr. ColorChip and Langka, whose products can match original manufacturer colors. If you carefully follow the directions, you can get good results.

If your automobile has multiple small dents that haven’t broken the paint, you can call a paintless dent remover. Sean McMullan of dent remover Crayford Coachworks in Los Angeles says he does a lot of pre-lease-return business. Owners who are about to wrap up a lease come to him to remove all manner of dents and dings. He estimates that his fees are about a third of what a body shop would charge for the same repair.

  • A Second-Chance Inspection

As you can see, having the inspection performed well before the end of the lease increases your chances of possibly saving some money. However, if you have an initial inspection and the manufacturer’s charge for the repairs seems reasonable, consider just paying the money and saving your time. If you decide to do some fixing up, most leasing companies will allow you to schedule a second inspection. The inspector will check the vehicle over again and verify that the repairs were done properly.

  • Pick a Dealership for the Return

In theory, you should be able to return the leased vehicle to any dealership of the same brand. But in practice, you’ll find that some dealers might be hesitant to take on an extra piece of inventory they hadn’t planned on. If you want the smoothest experience, go to the same dealership from which you bought the car. If you’ve moved or the dealership is no longer in business, you’ll obviously have to choose another one. Call the used-car manager to set up an appointment for the lease return. If you get the feeling your lease return won’t be welcome, it’s best to move on to a friendlier dealership. But if you have no other option, stand firm and ask to speak with the general manager.

  • Give Back What You Got

Remember to locate all the things that came with the car and bring them to the lease turn-in. For example, many people forget to bring the second set of keys they received when they leased the vehicle. Other pieces to return include tonneau (cargo) covers, the original floor mats, spare tires, and even third-row seats that were perhaps removed and stored in the garage.

  • Other Lease-End Tips

Contesting excessive use charges: If the excessive-use findings on a lease-return condition report seem out of whack, you have the right to contest them with a representative from the leasing company. While you might not get all the penalty fees removed, it’s likely you could knock them down and avoid a big payment. This approach is particularly effective if you are going to lease your next new vehicle from the same maker. The manufacturer might waive the cost of some or all repairs and fees if you remain loyal to the brand and lease another vehicle. The same may apply if you have gone over mileage limits for the vehicle.

  • Lease Return Option Possible Extention

Getting a lease extension: If you run out of time to take care of repairs or you haven’t yet found a replacement vehicle, you can request a lease extension. And if you’re wondering whether you should purchase your leased vehicle or whether it has equity that you can use. Deciding whether to buy the car: If the odometer indicates that you have gone way over your mileage limits or if you have truly excessive wear and tear, you may have reason to think about buying your leased vehicle. When you do what’s called a lease buyout, you will not be penalized for going over your allotted mileage or having a dent in your fender. Factor in those penalties when you’re deciding if buying your leased vehicle is the right move, but also take into consideration other factors, such as the vehicle’s residual value.

  • What do you want to drive next?

Now comes the fun part—deciding which vehicle you’d like to drive next. Leasing another vehicle allows lessees to take advantage of the benefits of driving a newer car while maintaining a low monthly payment. AMG CARS INC makes it easy to lease another vehicle from the same brand or to try something new.

Lease (or buy) another vehicle from the same brand

Many manufacturers will incentivize returning lessees to choose another vehicle from their brand. In addition to financial incentives such as loyalty rebates, some will waive the last few lease payments to help clients get into the newer model before their lease is over.

Lease (or buy) another vehicle from a different brand

Part of the fun of leasing can be the flexibility to drive a different car every few years. Some manufacturers will even offer rebates & incentives to current lessees of competing brands. These can make trying a new brand easier. (For more on our most leased brands see Which car brands do people lease or buy?)

Special order exactly what you want

Regardless of whether you stay with your current brand, it can often make sense to consider special ordering your new vehicle. Ordering allows you to get exactly the features you want on your new car—and avoid paying for other features you don’t want. We particularly recommended ordering European vehicles that can be configured in literally thousands of ways. Talking to your AMG CARS INC consultant three to four months in advance will give you time to determine if ordering will be a good strategy for you.

What Are My Options To End My Lease Early?

Return the vehicle to the dealership

This is a traditional lease termination, and it is an expensive option. When you return the vehicle to the dealership, you will be required to pay all penalties. In some cases, you may be required to make all outstanding payments, and pay additional penalties on top of any other fees. This should be a last-resort option.

Trade in your vehicle for another vehicle

It may be possible to lease another vehicle at the same dealership. The penalties and fees from your original lease will be rolled in (included) with the new vehicle contract, making your payments higher. This option is also expensive, but it allows you to absorb the penalties from the old lease over an extended period.

Purchase the vehicle from the leasing company

Every lease has a buyout or payoff. This is the amount due to the leasing company if you wish to purchase the vehicle outright at any point during the lease. Depending on the resale value of the vehicle, the payoff may be at or above market value, potentially requiring you to pay more for the vehicle than it is actually worth.

Find someone to take over your lease

You may be able to find a family member, friend, or co-worker to assume the balance of your lease payments. Several online companies offer this type of service for customers looking to sell their leases. Each leasing company has its own set of requirements, which often include a credit check and transfer fees, and there may be out-of-state restrictions to consider. Use caution when exercising this option: though you are no longer responsible for monthly payments, many leasing companies hold the original lessee liable in the event of a default.