Your Lease Is Ending. Now What?
If your lease maturity date is approaching, you are probably getting letters and emails from your leasing company. Maybe a call or two. They want to know what you are planning to do, and honestly, most people are not sure. The lease-end process can feel confusing if you have never done it before, but it follows a predictable pattern once you understand the steps.
Here is exactly what happens at lease end, what it costs, and how to prepare so nothing catches you off guard.
The Lease-End Timeline
Most leasing companies start reaching out about 90 days before your lease maturity date. Here is the typical sequence:
90 Days Out: Notification
You will receive a letter or email reminding you that your lease is ending. This usually includes a summary of your options (return, buy, or lease a new one from the same brand) and contact information for their lease-end department.
60 Days Out: Decision Window
This is when you should be actively evaluating your options. If you are considering a buyout, check whether your lease has equity. If you plan to return the car, start addressing any cosmetic issues. If you want to lease or buy something new, start shopping.
30 to 45 Days Out: Pre-Inspection
Most leasing companies will schedule a free pre-return inspection. A third-party company (AutoVIN is the most common) will come to your home or office, walk around the car, and document its condition. They will note any damage that goes beyond "normal wear and tear," check mileage, and verify all keys, manuals, and equipment are present.
This inspection is not binding. It is a preview of what the leasing company will charge if you return the car in its current condition. Think of it as a heads-up so you can fix things before the final turn-in.
Lease Maturity Date: Return or Buy
On or before your maturity date, you either return the car to a dealer, complete a buyout, or have already arranged a trade-in. If you do nothing, most leasing companies will continue charging you on a month-to-month basis until you take action, though the terms vary by lender.
Lease-End Fees You Should Expect
Here is a breakdown of every fee that could show up on your final lease statement:
Disposition Fee
This is a flat fee charged by almost every leasing company when you return the car. It covers their cost of processing, inspecting, reconditioning, and reselling the vehicle at auction. Typical range: $350 to $500.
Some brands waive this fee if you lease or purchase another vehicle from the same manufacturer. Ask your leasing company about loyalty waivers before you turn in the car.
Excess Mileage Charges
Your lease contract specifies a mileage allowance (commonly 10,000, 12,000, or 15,000 miles per year). If you exceed that total over the lease term, you pay a per-mile penalty. Rates typically range from $0.15 to $0.30 per mile.
Example: If you leased for 36 months with a 10,000-mile annual allowance (30,000 total) and turned in the car with 34,000 miles, you would owe for 4,000 excess miles. At $0.25 per mile, that is $1,000.
If you are significantly over, it may be cheaper to buy out the lease or trade it in rather than paying the mileage penalty.
Excess Wear and Tear Charges
"Normal wear and tear" is defined in your lease agreement, and each brand has slightly different standards. Generally, small door dings, minor scuffs on bumpers, and light interior wear are considered normal. But dents larger than a quarter, cracked windshields, torn upholstery, curb-rashed wheels, and bald tires typically trigger charges.
These charges vary widely. A single dent repair might be $75 to $150, while a full bumper respray could be $500 or more. The inspection report will itemize each charge so you know exactly what you are facing.
Missing Equipment Charges
If you are missing a key fob, the owner's manual, floor mats, cargo cover, or any original equipment, expect a charge. Key fob replacements are particularly expensive, often $200 to $400 depending on the brand.
How to Minimize Lease-End Charges
You cannot avoid every fee, but you can reduce your total bill significantly with some preparation:
Schedule the Pre-Inspection Early
Request the pre-inspection as soon as it is offered (usually around 45 days before maturity). This gives you time to address anything the inspector flags. You are not obligated to fix anything, but you can often repair items cheaper than what the leasing company will charge.
Fix Cosmetic Damage Yourself
Paintless dent removal, touch-up paint, windshield chip repair, and tire replacement are almost always cheaper when you handle them independently rather than letting the leasing company bill you. A local PDR (paintless dent repair) shop might charge $75 for a dent that the leasing company would bill at $150.
Replace Worn Tires
Tires with less than 4/32" tread depth are commonly flagged during inspections. A set of budget tires from a tire shop might cost $400 to $600 installed, while the leasing company could charge $200 or more per tire at retail pricing. If your tires are borderline, replacing them before the inspection is usually the smarter financial move.
Gather All Equipment
Find both key fobs, the owner's manual, any removable accessories (cargo nets, floor mats, headrest screens), and make sure they are in the car before the inspection. Replacement charges for missing items add up quickly.
Your Three Options at Lease End
When your lease ends, you have three paths:
Option 1: Return the Car
Drop it off at any authorized dealer for your brand, pay any applicable fees, and walk away. This is the simplest option and makes sense if the car has no equity and you are ready for something new.
Option 2: Buy Out the Lease
Purchase the car at the residual value set in your original contract. This makes sense when the buyout price is below market value, giving you instant equity in the vehicle. You can pay cash or finance the buyout through a bank, credit union, or your leasing company.
Option 3: Trade It In
If your car has equity, you can trade it in at a dealer or through a broker and apply that equity toward your next vehicle. This lets you capture the value without paying out of pocket for the buyout. A broker can handle the logistics and often get you a better price on the next car at the same time.
What Happens If You Do Nothing?
If your lease maturity date passes and you have not returned the car or completed a buyout, most leasing companies will automatically extend your lease on a month-to-month basis. You will continue making payments (usually at the same monthly rate), but you are not locked into a new term. Some lenders limit month-to-month extensions to 6 months. Check your contract for the specific terms.
Month-to-month can be useful if you need a few extra weeks to finalize your next vehicle, but it is not a long-term strategy. You are paying full lease payments on a car you have already finished paying depreciation on.
Full Disclosure
Vantage Auto Group helps clients navigate the lease-end process regularly. We can evaluate whether your car has equity, help you decide between returning and buying out, and source your next vehicle at dealer cost if you are moving on. We charge a transparent broker fee, and we are upfront about every cost involved. If returning the car is your best option, we will tell you that, even if it means we do not make a sale.
Start Planning Now
The lease-end process does not have to be stressful. Start 90 days out, request the pre-inspection, address any damage, and make your decision based on real numbers, not guesses.
Want help evaluating your options before your lease ends? Get a free quote from Vantage in about 5 minutes and we will walk you through the best path for your situation. No spam. No pressure. Unsubscribe anytime.
