Returning the leased vehicle is a very important step in a residual value lease: you can then choose another vehicle to lease.
- Returning a leased car may in some cases incur additional costs depending on the condition of the vehicle and the number of miles driven during the lease period.
- If you have maintained the car regularly, there should be no particular problems.
- At the end of the lease agreement, it is possible to return or buy back the leased car, with the supplier’s agreement.
Leasing: the choice between ownership and rental
A car lease agreement is generally concluded for a term of 24 to 60 months for an average annual mileage of 10,000 km to 30,000 km. The monthly lease payment may meet your needs compared to purchasing a new vehicle through more traditional car financing (car loan/auto loan).
Leasing with residual value is a popular solution for individuals who want to drive a new or recent model car. After a lease period defined in a highly regulated contract, the lessee has the option of becoming the owner.
He therefore has the choice between purchasing the car by paying the residual value of the vehicle (subject to the supplier’s agreement) at the end of the lease or returning the leased car. If he chooses to return the leased vehicle, he will have to comply with the terms of the contract, which are generally quite restrictive.
What are the terms and conditions for returning a leased vehicle ?
If the lessee decides to return the car at the end of the lease, it must be in perfect condition. The lessee must return the leased vehicle the day after the contract expiry date. They must return the car, keys, registration document, warranty and maintenance booklets, etc.
In the event that he loses these documents, he will be charged a fee for the issuance of duplicates by the leasing finance company.
End of lease: the car must be in very good condition
At the end of the car lease, the leased vehicle must be returned in perfect condition and working order, with all equipment and accessories. Obviously, you are not allowed to make any modifications to the bodywork or mechanics during the lease period. The vehicle must be in “standard” condition, i.e., with “normal” wear and tear.
Car leasing: what is standard wear and tear ?
Several elements of the car, which define the standard condition, are checked when the leased vehicle is returned: the bodywork, upholstery, tires, and mileage. In summary, there should be no stains on the seats, no scratches, no rust, and no apparent or hidden damage.
Specifically, supplier garages define the standard interior and exterior condition of the car as follows:
- The bodywork: no dents, scratches, rust, or stains.
- The upholstery: in good condition, with no stains, tears, or holes.
- The tires: they must all be the same brand, with a maximum wear of 50% and no damage or bulges.
- The engine: parts must not need to be replaced or show signs of abnormal wear.
- Mileage during the lease: this is also something that the supplier will check carefully. The number of miles you can drive during the lease period is specified in your lease agreement. Even if you have the option of increasing or decreasing this indicator during the contract (depending on the car leasing finance company), you must still return the vehicle without exceeding it. Otherwise, you may have to pay compensation for the excess kilometers. The amount of excess kilometers is specified in your leasing contract.
What additional fees may be charged to you ?
When returning a leased car, if the car you return is not in good condition, you will be charged repair costs. The amount varies depending on the condition of the vehicle.
The condition of the vehicle will be assessed by the garage supplying the vehicle, as it is the garage that is obliged to buy back the leased car from the leasing finance company, which is the legal owner, at the trade-in value stated in your leasing contract. If repair costs are charged, the lessee will have the opportunity to contest the assessment. However, the second assessment will be carried out at the lessee’s expense.
Similarly, if you drive more kilometers than expected, you will have to pay the difference, which is generally between 10 cents and 1 franc per additional kilometer driven beyond the maximum specified in the leasing contract.
In the event of a delay in returning the leased car, compensation will be requested by the leasing finance company. Furthermore, the lessee is only “released” from the lease once all outstanding amounts have been paid.
Can you return a leased car before the end of the contract? This situation automatically results in penalties with early repayment of the amounts due. However, LeaseTransfer can intervene and release you from the lease before the end of the contract under better financial conditions than early termination of the lease agreement.
What is lease buyout ?
Have you considered buying back your leased car? With a lease with residual value, this is possible from the third month onwards, and then every month until the end of the lease contract with residual value. Please note that this residual value is not reserved for the individual who signed the lease agreement: a third party can purchase the vehicle by paying the residual value at the time you wish to sell your lease. It is therefore the leasing finance company that receives the residual value of the lease in the event of early repurchase of the lease.
A leasing contract can also be redeemed during a debt consolidation, particularly in a situation where the credit institution offers to redeem the loans. It will pay the amount corresponding to the purchase of the loan, which means that the borrower becomes the owner of the vehicle.
Returning a leased car: advice from LeaseTransfer
Returning a leased vehicle should not be improvised. Here are three tips from our experts at LeaseTransfer.ch on best practices to follow:
- Read the contract carefully: before signing, check the terms and conditions for returning the leased car (penalty amounts, assessment of wear and tear, etc.). Don’t hesitate to negotiate the lease contract.
- Anticipate mileage: if you think you might exceed the mileage limit, don’t hesitate to adjust the mileage allowance during the lease term. Most leasing companies accept this type of request.
- Keep and return administrative documents: all documents and equipment provided must be returned (vehicle registration, warranty booklet, maintenance history, etc.). Failure to do so may result in additional charges.
Restitution of a leased car: what you need to know
- A leased car may be returned to the supplier at the end of the lease period and during the term of the contract under certain conditions.
- The supplier may charge repair and mileage excess fees. Returning the leased vehicle before the end of the contract is not recommended as it is very expensive. It is preferable to transfer the lease via our platform.
- The residual value allows the lessee, another borrower, or a credit institution to buy out the lease contract and become the owner of the vehicle.
