When returning a leased vehicle, you may undergo a prereturn inspection and could face charges for excess mileage or wear. You may also need to pay a disposition fee — a vehicle “turn-in charge” that covers costs of preparing the car for resale — depending on your contract. Most leases don’t refund unused mileage. However, if you’re considering buying the vehicle, its market value could be higher than the lease buyout price, potentially giving you equity.
Your End-of-Lease Options
Generally, there are three options when returning a leased vehicle:
• Lease a new vehicle: The disposition fee may be waived if you lease another vehicle from the same manufacturer. The dealer may grant some latitude with excess mileage or wear to seal the deal on your next lease, but policies vary.
• Buy your leased car outright: This typically avoids the disposition fee.
• Return the vehicle: Expect a final inspection and possible charges for excess mileage, excessive wear, and a disposition fee.
The Lease Return Process Step by Step
Step 1: The Prereturn Inspection
Most leasing companies recommend scheduling an inspection several weeks before your lease ends to identify excess wear or damage.
What’s Considered Normal Wear and Tear?
Standards vary by leasing company, so check the wear-and-use guide before the inspection. Depending on the company, examples of excessive wear may include:
- Excessive tire wear, usually less than 1/16-inch of tread depth.
- Wheel scrapes larger than 2 inches.
- Dents larger than a credit card
- Scrapes and scratches longer than 3 inches
- Chips or windshield damage larger than a quarter
Some lease agreements include a wear-and-tear allowance, but limits and coverage vary. Paint and body damage is expensive to repair, especially when a dent damages the paint and color matching is required. Check your agreement before paying for repairs yourself.
Prepare Your Vehicle for the Inspection
Before your inspection, take a few minutes to prepare your vehicle.
- Wash and clean the vehicle inside and out.
- Remove all personal belongings.
- Gather all keys, the owner’s manual, floor mats, cargo covers, and any other accessories that came with the vehicle, including charging equipment for an EV.
- Check for dents, scratches, cracked glass, and other damage.
- Inspect your tires for excessive wear and adequate tread depth.
Compare the cost of repairing damage yourself with what the leasing company may charge when the vehicle is returned.
- Paintless dent repair removes most dents and dings affordably if the paint is intact, often restoring panels to like-new condition.
- Factory-matched touch-up paint fixes deeper scratches; order by model year and paint code for an exact match.
What’s Considered
Normal Wear vs. Excess Wear?
Leasing companies expect normal wear and tear, but excessive damage may result in additional charges at the end of your lease.
Step 2: Mileage and Wear Charges
Even if your vehicle passes the inspection, you may still be responsible for certain lease-end charges. Knowing what to expect can help you avoid surprises.
Mileage charges
Exceeding the mileage cap in your contract typically costs 15 to 25 cents per mile. At 20 cents per mile, going 10,000 miles over the allowance will add $2,000 to your final bill. Check your lease agreement to confirm your mileage allowance and per-mile charge.
Excessive wear and tear
Minor scratches and everyday wear are generally acceptable. Large dents, deep scratches, cracked glass, damaged wheels, or missing equipment may result in additional charges. Your leasing company will inspect the vehicle to identify damage beyond normal wear and tear.
Tire condition
Tires are assessed as part of the vehicle’s overall condition. They should meet the lease’s minimum tread requirements and be free of major damage. Factory tires can last the length of a 36-month lease, but high mileage, poor alignment, or uneven wear can require replacement sooner. Before replacing tires, check with the leasing company. It may recommend approved replacement tires or offer competitive pricing that could save you money.
Step 3: Pay Disposition Fee and Any Lease-End Charges
A typical lease agreement includes a disposition fee when you return the vehicle at the end of the lease. Disposition fees commonly range from $300 to $500 and cover the processing and reconditioning of the vehicle for resale. Often, you can avoid paying it if you lease or buy your next vehicle from the same manufacturer, or if you buy the car you’re currently leasing.
PRO TIP: Bring all keys, accessories, and required documents to your scheduled return appointment. If you have questions about fees or charges, ask for an explanation before signing the final documents.
Generally, no. Most leases don’t refund unused mileage; the allowance simply expires. An exception is a contract that explicitly includes a low-mileage credit or bonus, which some leasing companies offer. Check your lease’s mileage terms, or call your leasing company directly, to see if yours does.
Many leasing companies allow you to return your vehicle during the final few weeks of your lease, but return windows vary. If you return the vehicle outside the permitted window or before the scheduled end date, it may be considered an early lease termination. That could result in additional fees and charges. Contact your leasing company to review your options before returning the vehicle early.
Do You Get Money Back for Low Mileage?
Generally, no. Most leases don’t refund unused mileage; the allowance simply expires. An exception is a contract that explicitly includes a low-mileage credit or bonus, which some leasing companies offer. Check your lease’s mileage terms, or call your leasing company directly, to see if yours does.
Can You Return a Leased Car Within 30 Days?
Many leasing companies allow you to return your vehicle during the final few weeks of your lease, but return windows vary. If you return the vehicle outside the permitted window or before the scheduled end date, it may be considered an early lease termination. That could result in additional fees and charges. Contact your leasing company to review your options before returning the vehicle early.
Lease Returns Bottom Line
Returning a leased vehicle doesn’t have to be stressful. Preparing for inspection, understanding potential lease-end charges, and reviewing your contract ahead of time can help make the process smoother. Whether you choose to return the car, buy it, or lease another one, knowing your options can help you make a confident lease-end decision.
Editor’s Note: We have updated this article since its initial publication. Cam Benty contributed to the report.
Regarding this 4th option to buy at EOL… does Dealer have to honor the original quoted Residual Value as the option to purchase vehicle at EOL ?
I am about to Lease a car for the 1st time! On the Lease agreement, there is a Residual Value… I would assume the option to buy out at end of lease? if so, does the Dealer have to honor that price at EOL even if car is worth more?
I intend to buy my Civic Si Coupe in December. Is there any pitfalls I should look for during this transaction. I realize in Texas I have to pay sales tax again on the residual value, but what other charges will I have? Can I deal with the leasing company direct and avoid extra charges by the dealer?
I just paid off my leased Honda and will pocket over $5,000.
A fourth option, that most people don’t seem to understand, is to sell your vehicle outright. If your vehicle is worth more than the residual value, you can sell the car and keep the difference. Most people just turn it in without realizing they are turning away $$. And you can be sure the dealership isn’t going to bring it up if you don’t.