The Ultimate Guide to Returning a Leased Car

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Typically, your leasing company will reach out to you 90-120 days before the end of your contract to set up your inspection and walk you through how to return your car lease.
Once you schedule your handover, you need to have a pre-inspection done. During this inspection, you’ll find out if there’s anything you need to fix to avoid being charged for excessive wear and tear on the vehicle.
To help you make sure the process runs smoothly, the car insurance super app Jerry has compiled everything you need to know about returning your leased car. 
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Set an appointment for your inspection 3-4 months before your lease is up

The dealership will probably contact you 90-120 days before the end of your lease with details about setting up your inspection and handover. However, they might leave the scheduling up to you. if you haven’t heard from them by 3 months from the end of your lease, give them a call. 
If it’s already been longer than that, be sure to call the dealership to schedule your handover at least 7-10 days before your lease is over. That way, they’ll be able to fit you in if they’re busy. Also, keep in mind some dealerships don’t do handovers on the weekend.
If you don’t return your vehicle in time, you can end up with failed collection charges and the vehicle could be repossessed, so it’s really important to make this call!
Pro tip: Although you can technically return a leased car to any dealership that sells that type of car, you’ll usually get the best service if you return your leased car to the dealership you got it from.

Decide what to do when your lease ends

You have a number of options at the end of your lease:
  • Return the car and walk away. This is the easiest option.  Simply turn in the car once your lease is up, pay any turn-in fees, and make arrangements elsewhere for another vehicle.
  • Start a new lease for a different vehicle. Just turn in your car and lease a newer model. If you do this, the dealership will sometimes waive fees for excess mileage or wear and tear, so it can be a great option if you think you’ll be charged for these.
  • Extend your lease. If you’re not ready to turn in your car as the end of your lease approaches, call your dealership and ask for a lease extension.
    • If you do this, keep in mind that even if you’re only extending your lease for a month, you’ll probably need to renew your vehicle registration and car insurance policy.
  • Buy out your vehicle. The buyout price for your car is typically set at the beginning of your lease. This can sometimes be more affordable than paying the fees if you’re way over miles or have excessive wear and tear. You can then either keep driving that car, or sell it and buy or lease a new one.
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Have your car inspected

Look over the “Wear and Tear Guidelines” for your lease

When you signed your lease, you should have been given a list detailing acceptable vs. excessive wear and tear. These guidelines can vary a bit depending on the manufacturer, so make sure to look over the list so you’ll be clear on the specifics.
Familiarize yourself with the list before your self-inspection or professional pre-inspection so you’ll know what you’re looking for. If you don’t have the list anymore, you can request a new one from the dealership, or you may be able to find it online.

Do a self-inspection

Before you look over your car, wash and dry it, and although it’s not strictly necessary, consider having it detailed. When your car is clean, it will be easier to spot any damages. 
Then, look over the car carefully, paying close attention to anything the dealership might consider excessive wear and tear.
Be sure to check:
  • Each panel of the vehicle, including the trunk, hood, and roof, for dents or scratches
  • Wheels, wheel trims, and spokes for scrapes or dents
  • Damage or wear on the tires, including the spare tire
  • Headlights, windows, windshield, and mirrors for chips or cracks
  • Interior for rips, tears, stains, or odors
  • Audio and dash controls for damage or missing knobs

Have a pre-inspection done by a professional

Pre-inspections are usually done by an independent inspector who’s chosen by the dealership. They’ll check for any wear and tear above what the dealership considers normal, including dents, scratches, cracks in your windshield, worn tread on the tires, and so on. 
After their inspection, the inspector will give you a list of any wear and tear that the dealership will charge you for at the handover. This gives you a chance to fix the damage so you don’t get fined.

Check the mileage of the vehicle

When you lease a vehicle, you agree to an annual limit on how many miles you drive. The limit is usually 10k, 12k, or 15k miles each year. 
If you go over those limits, you’ll have to pay an extra fee—usually around $0.15/mile. That can really add up, so if you’re close to going over and the end of your lease is coming up, call your dealership and ask for a mileage amendment.
With a mileage amendment, your lease payment will go up each month, but this still is usually cheaper than paying the excess mileage charge at the end of your lease.
Key Takeaway: Before your lease ends, examine the vehicle yourself, have a professional pre-inspection done, and check the mileage.

Fix anything considered unacceptable wear and tear

After your inspection, you have the opportunity to fix any damage to the vehicle that you might be charged for. You can have this done by the dealership, but it’s often less expensive for you to take the car elsewhere, like to an independent body shop. 
Although the specifics can vary, damage that’s typically considered unacceptable wear and tear includes:
  • Rust or corrosion
  • Dents larger than 2”
  • Scratches longer than 4”
  • Tears, holes, burns, or stains in the upholstery
  • Window cracks larger than ½”
  • Wheel gouges larger than 6”
  • Tire treads less than ⅛”
  • Check Engine Light on
  • Neglected vehicle maintenance
  • Missing parts or accessories
Key Takeaway: Check the “Wear and Tear Guidelines” from your dealership and try to repair anything that’s considered excessive damage.
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Be prepared to turn your car in on time

You might have to deal with additional fees if you don’t turn your vehicle in on time. Fortunately, there are a few ways to avoid paying steep penalties if you need to end your lease early or keep your car longer.

If you turn your car in late:

You’ll likely have to pay expensive fees, and the finance company may actually repossess your vehicle. This can affect your credit score, and it might be hard to purchase or lease a vehicle in the future.
To avoid this, ask for a lease extension if you need to keep the car longer.

If you need to turn in your car early:

Contact the leasing company at least a week in advance and ask them how to turn your leased car in early. Just keep in mind that you’ll have to pay an early settlement fee.
Other options for getting out of your lease early include:
  • Transferring your lease to someone else 
    • You’ll need to go through the dealership if you do this, and you may still be liable if the third party doesn’t pay.
  • Buying out the car and reselling it
  • Trading in your vehicle for another one
Key Takeaway: You could face extra fees for turning your car in late or early, but there are a few workarounds, so work with your dealership.

Clean your car before you return it

To make sure the car looks its best for the final inspection, wash it and have it detailed. You might also want to use a car paint touch-up pen to cover any light scratches.
Remove all of your belongings and make sure everything is in the car that came with it, like the service manual, extra keys, third-row seats, cargo covers, floor mats, and spare tire. 

Know what to expect on collection day

When it’s time to turn in your vehicle, take it to the dealership. They may give you a specific time to be there when you schedule the handover. If so, try to be there on time!
It’s best if you return the car to the same dealership where you leased it, but other dealerships may accept the return if they handle the same type of vehicle. For instance, you can return a Toyota to another Toyota dealership.
When you arrive at the dealership for the handover, you’ll need to:
  • Have a final inspection done
  • Check the mileage
  • Sign off on the inspection report
  • Turn in any original equipment, the service manual, extra keys, etc
  • Pay any turn-in fees
  • Swap for a new vehicle (if you’re getting one)

How to get car insurance for a leased car

Whether you’re renewing your lease or leasing a new vehicle, you’ll need car insurance. Jerry is a car insurance broker and super app that can help you save big on insurance for your leased car. In fact, the average Jerry user saves $879 a year on their car insurance! 
It takes less than a minute to sign up, and Jerry will handle all of the paperwork for you. They’ll even help you cancel your old policy, and you can text an agent for help at any time. 
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You’ll usually have to pay a disposition fee, sometimes called an administrative fee, of around $300-$400.
Sometimes you might see a slight drop in your credit score after you return a leased car because you’ll have one less active account being reported. And of course, your score will be impacted if you turn in the car late or don’t pay what you owe.
You should typically start the return process about 90 days before your lease is over.

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