At the end of your car lease, you have three primary options: return the vehicle, buy it outright, or lease a new car. Your decision should be based on the car's market value compared to your lease's residual value, your mileage and wear-and-tear, and your future transportation needs. The process involves a final inspection, settling any potential charges, and handling the paperwork.
Before your lease term ends, the leasing company will contact you to schedule a pre-inspection, typically 60-90 days prior. This is a crucial step where an inspector assesses the vehicle for any excess wear and tear that might incur charges. This includes things like dents larger than a credit card, deep scratches down to the primer, or tire tread depth below 4/32 of an inch. Addressing minor issues before the official inspection can save you money.
Your three main options are:
- Return the Vehicle: This is the standard path. You'll turn in the car at the dealership. If you stayed within your mileage limit and the car is in good condition, you may owe only a disposition fee (usually $300-$500). If you exceeded mileage or there's excess wear, you'll be billed for those costs.
- Buy the Vehicle: You can purchase the car for its pre-determined residual value, which is stated in your lease contract. This is a great option if the car's current market value is higher than the residual, or if you've grown attached to it and know its history.
- Lease a New Car: Often, the dealership will encourage you to start a new lease. You may even be able to transition early if your current lease allows. This is an opportunity to get into a newer model with the latest technology.
Be prepared for potential end-of-lease costs. These can include charges for excess mileage (often $0.15 to $0.30 per mile over your limit), excess wear-and-tear, unpaid taxes, and a disposition fee. Some costs may be negotiable, so it's worth discussing them.
| Common End-of-Lease Consideration | Typical Cost/Detail | Key Factor |
|---|
| Excess Mileage Fee | $0.15 - $0.30 per mile | 10,000 vs. 12,000 annual mileage allowance |
| Disposition Fee | $300 - $500 | Non-negotiable fee for returning the car |
| Tire Tread Depth Minimum | 4/32 of an inch | Measured during inspection; below incurs charge |
| Dent/Chip Size Limit | Larger than 2 inches (credit card size) | Size and quantity matter |
| Excess Wear & Tear | Varies (e.g., $75 for scratch, $250 for dent) | Based on a standardized guide |
| Residual Value Buyout | Set in original contract | Compare to current Kelley Blue Book value |
