Leasing Hub

If you're new to leasing & want to learn about the process, Leasing Options' comprehensive guide has everything you need to know about first-time car leasing

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Returning a lease car

As you approach the end of your car lease, there are generally two options to consider:

  • Select a new car lease deal
  • Hand your car back and arrange for it to be collected

Depending on your circumstances, you may also be interested in extending your car lease.

Each option has its benefits and is suited to your budget and lifestyle. Below, we explore the processes involved, whether you want to upgrade to a new vehicle or, at the end of the contract and return the car.

What to expect when returning a leased car?

Whether you decide to hand your current vehicle back or look at another leased car contract, there are a few things to organise beforehand.

First, inspect the vehicle against the fair wear and tear policy. Leasing companies understand that the car may have some minor dints and chips during the agreement. However, anything over the normal wear and tear may be subject to a repair fee.

Next, you'll need to arrange the collection of your leased car. Again, it's best to contact your account manager, who will happily assist. At this point, if you're not taking out another leasing deal, there's nothing left to do (unless there are excesses to pay).

If you're swapping to a brand new lease, you'll need to select the car you want and arrange the new contract with your account manager. Once completed, the normal process of delivery will take place.

Preparing for the end of your car lease

Before your car is collected, you must inspect your vehicle and ensure that key areas are covered. These include:

  • Clean the vehicle inside and out
  • Ensure you have all the documents – MOT, service handbook and owner's manual
  • Remove all your personal belongings
  • Make sure nothing is missing from the interior, such as parcel shelf, spare tyre, etc.
  • Inspect the vehicle for damage

Paperwork to return lease car

When your car is collected, you must ensure the necessary paperwork is returned. This includes:

  • Vehicle and owner's handbook
  • V5 document
  • Up-to-date service history
  • Signed inspection report
  • Valid MOT certificate (if applicable)

End of lease process

The process at the end of your leasing contract is as follows:


Arrange collection of the car


The collector inspects the vehicle for any noticeable damage


You sign to confirm your agreement with the condition report and notes


The vehicle is taken away, and further inspection is carried out as per BVRLA guidelines


Any excess charges are invoiced and paid in full


Contract ends

BVRLA fair wear and tear

All leasing contracts come with a fair wear and tear policy. Leasing companies understand over a vehicle's life, it will see normal levels of wear and tear, but if you experience excessive damage, charges apply at the end of the lease.

Fair wear and tear policies follow the BVRLA Code of Conduct. So your vehicle is dealt with fairly during the inspection. Minor damage is covered, such as small areas of chipping and a shallow scuff on the surface. However, major bumper scuffs, large chips and cracks are not covered.

Before returning your vehicle, it's best to check it against the policy. Leasing Options provides a handy checklist of steps to take before handing back your car. For more information, you can also check out the BVRLA guidelines.

Organising your lease vehicle collection

You will be advised by your account manager how and when to contact the finance company to organise a date, time and location for the collection of your vehicle.

Usually, your vehicle will be collected from your home address or place of work, whichever is easiest for you. Collection times are generally between 8 am and 6 pm, Monday to Friday, whatever suits you best.

What happens when my car is collected?

At the end of the lease, you organise for your car to be collected. Once you've agreed on a date, the collector will arrive and inspect the vehicle.

At this point, they'll show you any areas of concern, and you'll see the condition report with notes detailing any issues. They will also give you a digital form to sign to agree on the report notes.

Once completed, the car will be taken away, and a more thorough inspection will be carried out. If anything arises from this, a final invoice will be issued. Once paid, the contract comes to an end.

Tips when returning your lease car

Our top tips when returning your vehicle are to make sure that:

  • The vehicle's service history and MOT are up to date where applicable, and that you have all the documentation to hand
  • The vehicle is clean inside and out, so a thorough inspection can occur
  • All keys and, where required, electric car charging cables and sat nav data card are present
  • Any personal data is removed from the onboard computers
  • The vehicle is in full working order, and no warning lights are displaying on the dashboard
  • The vehicle has no damage to the bodywork and trim, which are over acceptable levels of fair wear and tear
  • The tyres meet the minimum UK legal requirement for tread depth, and there is no damage to the sidewalls
  • The vehicle interior is free from stains, odours and damage to the upholstery
  • All windows are free from cracks, chips or holes, and any required repairs have been done professionally
  • All personal belongings have been removed, and car items are present and correct (such as the parcel shelf, headrests, spare tyre, etc.)

What happens if I exceed my mileage limit?

Your mileage is agreed upon at the start of your leasing contract. If you go over this amount, excess charges will apply. They are calculated on a price-per-mile basis, which is set out in your agreement.

Let's say you've agreed on 8,000 miles with an excess charge of 10p per mile, but ended up driving 8,420 miles in total. Your total excess charge would be £42, as an example. If you need to increase your mileage during the contract, contact your account manager to discuss the options.

Extending car lease and lease renewals

Other options at the end of your vehicle lease include extending your agreement or renewing. Below, we explore the process of each route.

How do I extend my lease?

There is the option to extend your car lease. This is an agreement between you and the finance company, which extends the date of the contract beyond its original period.

  • Informal extension
  • Formal extension

Informal lease extension

Otherwise known as extended hire or a rolling contract, an informal extension enables you to use the vehicle beyond its contract date. This short-term option often comes in handy in the transition period for a new lease deal. However, the car can be recalled anytime, and not all finance companies offer this option.

There are several benefits of an informal extension, including:

  • No admin fees
  • No contract end date (although it can be recalled at any time)
  • No upfront charges
  • Extension deals, which could reduce your monthly charge
  • No credit check

Formal lease extension

Just like it sounds, a formal lease extension is a formal agreement between you and the finance company. This enables you to extend your lease term for up to 12 months.

This option means you'll receive a modified agreement with the new details. You'll also get a revised monthly instalment notification.

The benefits of a formal lease extension are:

  • No upfront charge
  • Road tax is included
  • Agreed term extensions (car cannot be recalled during this time)
  • Modified monthly payment, which could lower the instalments

What is the difference between formal and informal lease extensions?

The key differences between formal and informal lease extensions are:

How long can I extend my lease by?

Extension length depends on the agreement between you and the finance company. An informal extension has no set end date, but the vehicle can be recalled anytime. In contrast, a formal extension can be extended for up to twelve months.

When should I extend my lease?

If you're considering extending your car lease, typically, you'll need to be within the last 90 days of the lease contract. Payments also need to be up to date.

Am I eligible to extend my lease?

The option to extend a vehicle lease is at the discretion of the finance company. In some cases, they may not offer it.

Eligibility criteria apply for an extension request. This includes:

  • The lease must be within the last 90 days of the contract
  • Vehicles must not have any outstanding requests attributed to them, such as removing or adding maintenance packages
  • Monthly instalments must be up to date

How much does it cost to extend my lease?

Costs vary depending on whether you choose an informal or formal extension. You will need to contact your leasing company is discuss the additional charges. Some finance providers offer deals for special extensions, and this may reduce your monthly payments. In addition, if you opt for a formal extension, an admin fee applies.

Pros and cons of extending a lease

Pros of extending a lease

  • Extension deals, which could lower your monthly payments
  • No upfront costs
  • No credit check required
  • Road tax is included
  • Allows time to decide your options before the end of the lease
  • Already familiar with the car and its history
  • Provides time to budget for your next lease deal

Cons of extending a lease

  • Admin fees apply to a formal extension
  • Still required to meet maintenance and servicing obligations
  • The car may need an MOT
  • The vehicle warranty may have expired
  • Breakdown cover expired
  • Early termination fees may apply

End of car lease FAQs

Below, you'll find some of the most common leasing FAQs. If you can't find the answer to your question, please contact us to discuss your car lease.

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