You're coming to the end of your car lease and it suddenly occurs to you: Will you get charged for all those dings, dents and upholstery stains? Is there anything you can do to offset these lease-return charges?
There are, of course, other end-of-lease questions to consider, such as whether you should purchase your leased vehicle and whether it has equity that you can leverage. Our "3 Ways to Turn Your Lease Into Cash" story has answers on those subjects. This article will only deal with avoiding charges in the lease turn-in process.
You are probably aware that the leasing company will charge you for any damage it considers to be more than normal wear and tear. But you are probably wondering what "normal" is.
"The term 'normal wear and tear' is the largest disconnect between consumers and manufacturers," says Jeff Huang, who has worked in the lease inspection business in Southern California for years. Manufacturers want to minimize what they'll have to spend on reconditioning, he says. Any damage to the car that's going to cost more than an average amount of money to refurbish is called "excessive" wear and tear.
Mary Hellen Owen, market planning manager for Toyota Financial Services, agrees that the lease return is a moment of anxiety for people. "There's a lot of apprehension about 'What do I do? When do I do it? What can I be penalized for?'"
Toyota Financial Services developed a comprehensive lease-end program to let them know the lease is winding up "and we are going to be ready to help," she says.
The Lease Inspection
While there is some variation in the process, the lease return process typically starts about 90 days before the end of the contract, says Joe Spina, an Edmunds car lease expert. 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 of your car.
Many manufacturers use an independent company to conduct the 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.
Most manufacturers look for damage in these general categories:
Huang said inspectors measure the size and depth of dents and scratches and then 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 Inspection
Most manufacturers' Web sites provide specific information about the end-of-lease process and a detailed definition of wear and tear, also referred to as "wear and use." Owen said Toyota created a lease turn-in site that is as customer-friendly as possible, and even includes a sample inspection report so people can see what kinds of damage will incur a charge.
Owen says inspectors look for any dents or scratches in Toyota vehicles that are bigger than an area that can be covered by a credit card. She adds that customers are not often charged for "curb rash" (scratches to alloy wheels and wheel covers) or normal tire wear.
To prepare for the inspection, Huang recommends removing all personal items from the car and washing it. 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, he says.
Some scratches only cut through the outer layer of paint called the "clear coat." These scratches can sometimes be eliminated by a thorough detailing job. If a scratch is deeper, and you know the manufacturer will charge you for it, Huang recommends buying a small bottle of touch-up paint from the manufacturer's parts department. However, he says to use a thin-bristle brush from an art store, not the thicker brush that comes in the touch-up paint bottle.
Handling Additional Charges
If you have the inspection performed well before the end of the lease, you have a chance to repair some of the damage yourself and possibly save some money. However, if the manufacturer's charge for the repairs seems reasonable, just pay the money and save your time, Spina says.
If your car has multiple small dents that haven't broken the paint, you can call a paintless dent remover. Sean McMullan of Crayford Coachworks in Los Angeles, says car owners often call him just before they return their leased car to remove multiple dents, dings and other indiscretions. He estimates that his fees are about one third of what a body shop would charge for the same repair.
Once the repairs are complete, 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, Huang says.
Common Problems
Owen says that inspectors will also remind customers to locate all the things they are supposed to provide at the lease turn-in. For example, many car owners forget to bring the second set of keys with them when they turn in their leased cars.
"The thing to remember is that if it was on or in the car when it was first leased, it needs to be returned with the car," Owen says. Besides keys, that includes things like tonneau (cargo) covers, the original floor mats, spare tires and even third-row seats that were perhaps removed and stored in the owner's garage.
Other Lease-End Tips
Replace the tires early: Dennis Rayfield, formerly a fleet manager and currently an Edmunds Live Advice manager, says he advised his clients to buy new tires after the second year in a three-year lease. Then there would be no chance the manufacturer would charge them for excessive tire wear. Plus they would get some of the benefit of driving on new tires.
Contest excessive use charges: If the excessive-use findings on a lease-return condition report seem out of whack, you have the right to protest them with a representative from the leasing company, Rayfield says. While you might not get all the penalty fees removed, it's likely you could knock them down by $200-$300, he says. This is a particularly effective approach if you are going to lease your next vehicle from the same maker. The manufacturer might waive the cost of some or all the repairs and fees if you remain loyal to the brand.
Get a lease extension: Owen adds that 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. This is an option that almost 10 percent of Toyota lessors choose, she says.
By planning ahead, and knowing what the inspectors will be looking at, you can reduce lease turn-in expenses — or at least be ready to deal with them when the time comes.
