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Car Leasing: What Happens at the End?

What happens at the end of your car lease? Car leasing expects Lease4Less take a look at what happens at the end of your contract and break it down into a simple guide.

A question we usually get asked is; what happens at the end of my car lease? Well, that all depends on what type of contract you have opted for. We delve into the dreaded 'end of contract' to let you know what happens at the end, what to avoid and squash some common myths regarding the end of your car leasing contract.

What is car leasing?

First of all, lets start by giving you a bit of an insight as to what car leasing is. 'Car leasing' is quite a broad term in all honesty, but it's basically an alternative method of financing your car.

Car leasing is broken down into different methods of finance:

Contract Hire:

Usually the most popular, and is often the main term used when referring to car leasing. This agreement allows a driver to drive a vehicle for a set period of time, but the driver will never actually own the vehicle. Typically, a monthly rental plan is set up for the length of the contract, on completion of which the vehicle is returned to the hire company.

Personal Contract Hire:

Is fundamentally equal to ordinary contract hire but it is only available to private individuals. This represents the most common form of leasing and is what most people refer to as ‘car leasing.’ With a PCH agreement the customer takes control of a vehicle for a set period of time, but never actually owns the vehicle outright. Instead, once the fixed monthly rental plan has been completed and the contract comes to an end, the customer simply returns the vehicle to the leasing company. Alternatively, you can also take out a fresh personal contract hire lease.

Personal Contract Purchase (PCP):

Works on the same premises as PCH (personal contract hire) but with a significant difference. On completion of the deal, there is a voluntary balloon payment you can choose to fulfil in order to take full possession of the vehicle. The amount payable is established at the outset and will allow drivers to keep their vehicle if they wish to do so. This option is not mandatory; drivers also have the option to return their vehicle to the leasing company.

These are three of the most popular methods of car leasing. Although it's worth noting that there are different methods of car leasing and car finance, it's also worth noting that every method has it's pros and cons any may not be the right method for you.

But we're not here to talk about methods of finance... You want to know what happens at the end of your contract!

The end of your car lease:

Once your lease comes to an end, you are faced with a number of options, depending on what type of contract you have taken out. You can either hand the vehicle back and start a new contract on a new car, or hand the car back and walk away from leasing if you decide that leasing a vehicle isn't for you.

Arranging collection at the end of your car lease:

Once you have decided what to do with your lease, your lease company will be able to discuss with you a collection date for the finance company to come and collect the car.

If you decided to take out another lease, most finance companies/car leasing companies will take this into consideration and have your new car delivered on the same day your current vehicle is collected.

Finance companies aren't expecting a new car back:

Now here comes the scary stuff...

Not really, we're going to clear up some common myths about returning your car to the finance company. You'll hear all sorts when you speak to someone who's never leased before. "You'll get stung! You've gone 100 miles over!" "You've got a stone chip on your car, they'll have you for that."

The stories go on... And for the most-part they aren't true.

Excess mileage charges on a lease car:

At the quotation stage, car leasing companies will ask you for your anticipated mileage. Now, no-one can see into the future, we understand that, and the finance companies understand that too.

Excess mileage charges will occur if you do go over your expected mileage, and it will depend on your car how much you will be charged. Excess mileage charges vary from car-to-car, and you will be made aware of your excess mileage charge before you take out the contract. As an example if the excess was 5 pence per mile then for 1000 miles over contract you would be charged £50.

So it's not the end of the world if you were to go a few miles over, but it's something to consider throughout your contract.

BVRLA's Fair Wear and Tear Guide:

The finance company isn't expecting showroom condition when you return your car, at the same time they don't want a shed. Common sense typically applies when checking over your car for any damage at the end of your contract.

Just think, if you were buying the car at the end of the contract, would you be happy with the condition for its age?

All leasing companies are obliged under the BVRLA's Code of Conduct. The BVRLA is the British Vehicle Rental and Leasing Association. They have put guides in place to not only protect the finance companies, but to protect consumers as well.

SEE: BVRLA Fair Wear and Tear Guide

It's usually best practice to check over your vehicle, making sure all electronic and safety features are in working order, no rust or corrosion appears on the car, the car is roadworthy and no warning lights are displayed and that there is enough fuel for collection.

Make sure the car appears in good condition and represents the age of the vehicle, minor stone chips usually aren't a problem but if there is substantial damage to the car such as dents or scratches it's always good to take it to a body specialist to get it checked out and have any work that is needed carried out.

Okay, it may take a bit out of your wallet, but it's better than getting a bill from the finance company to cover the damage. (Always check with your leasing company first before going further to see if this is within the guidelines and regulations set by the finance company.)

Get a valet:

This isn't a requirement as such, but it's usually a good idea to go and get a valet. A valet can help in removing light body marks such as scuffs, and will also get the car nice and clean inside and out. As said before, this isn't a requirement, but it's what we do when returning our cars, mostly to get them early morning coffee spills out of the seats.

If you have any problems at the end of your lease it's usually best to contact your account manager at the leasing company you took the contract out with. They will be able to talk you through any issues as well as informing you about any issues you could face before they arise.

Still unsure about leasing a car? Here's Everything You Need to Know about Car Leasing.

Now you should be all clued up about what happens at the end of your car leasing contract. Have any other questions? Feel free to send suggestions to

Have some more questions about car leasing or looking for a quotation? Fill in the form below to speak with one of our friendly leasing consultants.

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Posted on 11th May 2017 at 12:49 PM

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