End-of-Lease Charges: A Comprehensive Guide

As your lease term concludes, it’s crucial to understand end-of-lease charges and how they can impact your financial responsibilities. Let’s delve into why these charges exist, how they are determined, and what steps you can take to minimize potential costs. Book Inspection.

Why End-of-Lease Charges? End-of-lease charges arise when the leased vehicle, its equipment, or accessories deviate from the originally agreed-upon condition at the lease’s commencement. Failure to maintain, use, or care for the vehicle as initially specified can result in charges. These fees compensate the leasing company for repairing damages or replacing missing items like keys or service history records. Approximately charge £100 per panel resprays. Read short and long term leasing.

Determining End-of-Lease Charges: These charges may still apply even if the leasing company opts not to repair damage or replace missing equipment before selling the vehicle for commercial reasons. However, customers won’t be charged for refurbishments stemming from normal wear and tear.

Taking Control: To mitigate potential charges, lessees can arrange repairs for damages exceeding agreed-upon return standards. These repairs should be carried out professionally, ensuring a transferable warranty on the work.

What to Expect at Vehicle Return: Before returning the vehicle, lessees should be informed about the return process. Some companies may conduct a full inspection at collection, while others do it later at a designated site. Being present during the vehicle collection is recommended, allowing both parties to check and agree on the vehicle’s condition.

Maintenance Matters: Whether you’re leasing a company car or personally, adhering to the manufacturer’s guidelines for vehicle maintenance is essential. Employers may outline specific maintenance requirements for company cars, while personal lessees should consult their leasing company or service provider.

Personal Touch: For those with personal number plates, coordinating with the leasing company or service provider well in advance ensures a smooth transfer to a new vehicle.

Documenting the Journey: Maintaining all vehicle documentation, including the V5C registration document, MOT receipt, operation manual, and service book, is crucial. Following manufacturer recommendations on fuel, additives, lubricants, and battery care is also emphasized to avoid potential warranty issues.

End-of-Lease Inspection: If the vehicle cannot be inspected due to weather conditions or cleanliness issues, a charge may apply. Lessees should be informed of any potential damage charges within four weeks of the vehicle’s return, along with a breakdown and evidence supporting the charges.

In Case of Dispute: In the event of a dispute, customers have the right to an independent examination by a qualified engineer. The engineer’s decision is binding on both the customer and the leasing company, with the company refunding examination costs if the decision favors the customer.

Vehicle Return Standards Checklist: A detailed checklist outlines standards for various aspects, including general appearance, road safety, documentation, keys, tyres, mechanical condition, vehicle interior, and more. Following these standards helps lessees assess their vehicles and avoid unnecessary charges.

Conclusion: Understanding end-of-lease charges and actively participating in the return process empowers lessees to manage potential costs effectively. By adhering to maintenance guidelines, documenting the vehicle’s journey, and being proactive, individuals can ensure a smooth and cost-efficient end to their leasing experience.

British Vehicle Rental and Leasing Association Industry fair wear and tear standard explained:

End-of-lease charges Why do we have end-of-lease charges? End-of-lease charges occur when the vehicle, its equipment or accessories are not used, maintained or looked after as originally agreed at the start of the lease. The charges compensate the leasing company for the cost of rectifying damage or missing items such as keys or service history. They can still be applied at end of lease in cases where the leasing company decides for commercial reasons not to repair damage, replace missing equipment, etc, before the vehicle is sold.

Customers are not charged at end of lease for any refurbishment that arises from normal wear and tear. Customers can arrange to repair any damage that’s outside the agreed return standard before returning the vehicle, provided the repairs are carried out to a professional standard by a reputable repairer who can provide a full transferable warranty on the work.

What BVRLA members must do On entering the lease agreement with you, BVRLA members must explain clearly to you their end-of-lease vehicle return standard, the condition of the vehicle (it must be roadworthy), the presence and condition of any vehicle keys and accessories and how they require you to look after the vehicle (eg servicing and maintenance) during the lease. What customers should expect at vehicle return You must be advised what to expect when the vehicle is collected. Some leasing companies may arrange a full vehicle inspection and condition report when the vehicle is collected. Other leasing companies will collect the vehicle and complete the full inspection later at the leasing company’s nominated site. It is recommended that you are present when the vehicle is collected. At collection, you and the representative from the leasing company must check and agree on the vehicle’s condition. All readily apparent damage to the vehicle will. Customers: advice and information The vehicle must be used, maintained and looked after according to the vehicle manufacturer’s guidelines. If a company car, your employer may outline preventative vehicle maintenance and road safety measures that you need to undertake on a daily or weekly basis. If you are personally leasing the vehicle, you should consult the leasing company or your service provider.

Personal number plates You should liaise with your leasing company/service provider/ dealership 10 to 12 weeks before the end of lease to ensure your personal number plate is transferred from your current vehicle to your new one. You will be given information at the start of the contract to help you satisfy the return standard required by the leasing company. Following the advice provided will keep the vehicle in good condition and minimise any de-hire charges at end of lease. Drivers should always follow the manufacturer’s recommendations regarding fuel and fuel blends, additives such as Adblue, lubricants and battery re-charging (if an electric or hybrid vehicle) because the vehicle’s warranty may be invalidated and long-term damage caused through inappropriate use of fuels, additives, lubricants and battery usage. If you discover what you believe to be a manufacturer’s fault on the vehicle, you should alert the leasing company/service provider/dealership as soon as possible to get the issue resolved. be noted on the vehicle collection sheet and both parties should sign the documentation or hand-held device. If the vehicle cannot be inspected for any reason, due to poor weather or poor light, for example, you will be asked to agree to abandon the inspection and sign the condition report to that effect. If the vehicle is not sufficiently clean to allow a detailed inspection, the collection process may need to be abandoned and a charge may be applied. You will be asked to agree to abandon the inspection and sign the condition report to that effect. If the BVRLA member intends to charge you for damage or missing equipment when the vehicle has been inspected, you must be advised of those charges no later than four weeks after the vehicle was returned.

The BVRLA member must provide you with a summary breakdown of the charges, an explanation of how the charges have been calculated and photographic/ video or other documentary evidence supporting why the charges have been made. You will also be advised how you can query the damage charges made. In case of a dispute In the event of a dispute about the condition or damage to the vehicle, customers have the right to pay for an examination of the evidence by an independent qualified engineer, eg an engineer who is unrelated to the original inspection and agreed by both parties. The engineer’s decision will be binding on both the customer and the BVRLA member. If the engineer finds in the customer’s favour, the BVRLA member will refund the reasonable cost of the examination to the customer.

General appearance, road safety, documentation, keys All electronic safety features and The vehicle must be roadworthy devices to help the driver, eg parking and no warning lights should be sensors, adaptive cruise controls, illuminated. etc, must be in working order. There should be no rust or corrosion on any part of the bodywork or trim of the vehicle. There should be sufficient fuel (or residual charge in the battery if an electric vehicle) to effect the vehicle collection.

Maintenance, servicing and repairs The vehicle must have been inspected and serviced according to the manufacturer’s servicing/ maintenance schedule. The service book supplied with the vehicle must be present and date-stamped by the service agent/repairer approved by the leasing company as evidence that the service has taken place. All necessary maintenance and repairs must be carried out by a service agent/repairer approved by the leasing company. If the leasing company is not responsible for service, maintenance and repairs, a proper record must be kept and be available for inspection on the vehicle’s return. If the service record is kept electronically, drivers should ensure the service agent/repairer approved by the leasing company has re-set the service interval display in the vehicle’s on-board service history unit.

Any repairs made to the vehicle before its return must be to a professional standard by repairers who can provide full transferable warranty on their work. Unauthorised odometer changes are not acceptable. Any odometer alterations must have been reported to, and approved by, the leasing company.

Documentation All vehicle documentation, including the V5C vehicle registration document (where appropriate), MOT receipt, operation manual, service book and any other documents relating to vehicle equipment, must be intact and available. All documents must be in the vehicle on its return – including details of all audio equipment security codes.

Paintwork, body, bumpers & trim There should be no rust, corrosion or discolouration on any painted area, including painted bumpers, body moulding and mirrors. Repaired chips, scratches and dents are acceptable provided the work is completed to a professional standard by repairers who can provide full warranty on their work. Obvious evidence of poor repair, such as flaking paint, preparation marks, paint contamination, rippled finish and poorly matched paint, is not acceptable. Appearance The vehicle’s exterior should be sufficiently clean to allow a detailed inspection. The inside should have been valeted, cleared of rubbish and the ashtrays emptied.

Vehicle keys A full set of keys, including the master key, spares and locking wheel-nut keys, should be returned if originally supplied. If a remote locking system is fitted, the appropriate remote controls should be available and functioning.

Chips Small areas of chipping, including door edge chipping are acceptable. If the areas of chipping require the entire panel, bumper or trim to be repaired or repainted, the damage is not acceptable. Dents Dents (up to 10mm in diameter) are acceptable provided there are no more than two (2) per panel and the paint surface is not broken.

Dents on the roof or swage line on any panels are not acceptable.

Scratches Scratches and abrasions up to 25mm are acceptable, relative to the vehicle’s age and mileage, and provided the primer or bare metal is not showing. Moulding, wheel arch trims Scuffs and scratches up to 25mm are acceptable provided the moulding or trim is not broken, cracked or deformed.

Soft and hard top convertibles Convertible roofs must be fully operative and free from damage, rips and tears. The rear window must not be cracked or creased. Accessories originally supplied, eg tonneau cover, must be present and in good condition.

Badges and labels Badges, emblems, labels, logos and advertising livery applied by the customer to the bodywork or glass of the vehicle should be removed before returning the vehicle. Removing badges, emblems, logos and livery must be done professionally and the vehicle returned to its original colour and condition unless otherwise agreed in writing by the customer with the vehicle leasing company. Any damage caused by fitting or removing badges, emblems, labels, logos and advertising livery, including faded paintwork, is not acceptable.

Tow bars Tow bars must only be fitted with approval from the leasing company. If fitted, a tow bar must be in good, rust-free condition, with electrical connections that work properly. A ball cover must be in place.

Windows, glass, door mirrors & lamps Windows/windscreens Light scratching is acceptable provided it does not interfere with the driver’s line of sight and any heating elements still work properly.

Chips, cracks or holes are not acceptable. Repaired chips within the driver’s line of sight are not acceptable. Repaired chips outside the driver’s line of sight are acceptable provided they are repaired to a professional standard and the work is warrantied.

Door mirrors Missing, cracked or damaged door mirrors are not acceptable. If adjustable and/or heated door mirrors, they must work correctly.

Lamps & lenses All lamps must work. Minor scuff marks or scratches up to 25mm are acceptable. Holes or cracks in the glass or plastic covers of lamp units are not acceptable.

Tyres & wheels Tyre wear & damage All tyres, including any spare, must meet minimum UK legal requirements and comply with the vehicle manufacturer’s recommendations of tyre type, class* size and speed rating for the vehicle. There must be no damage to sidewalls or tread. Evidence of uneven wear due to under- or over-inflation is not acceptable.

Wheels & wheel trims Dents and holes on wheel rims and wheel trims are not acceptable. Scuffs totalling up to 50mm on the total circumference of the wheel trim and on alloy wheels are acceptable. Any damage to the wheel spokes and the hub of the alloy wheel is not acceptable. The spare wheel (including ‘spacesaver’), jack and other tools must be intact, stowed properly and in good working order. The emergency tyre inflation kit, if supplied when new, should be in full working order, serviceable and ready for use.

* EU Tyre Labelling Regulations effective 1 November 2012 describe the performance of a vehicle’s tyres according to three factors: FUEL EFFICIENCY (the tyre’s rolling resistance), VEHICLE SAFETY (the tyre’s wet grip) and EXTERNAL ROLLING NOISE (expressed in decibels). Replacement tyres should be in the same class as those which are sold Mechanical condition The vehicle should be returned in a safe, legal and reliable mechanical condition, capable of passing an MOT test.

The vehicle’s engine management system should not be displaying any warning light, eg diesel particulate filter (DPF), tyre pressure system (TPS), or oil pressure. If a warning light is illuminated, the vehicle may not be driveable and the collection process abandoned, in which case a fee may be charged. Advisory illuminated alerts are acceptable, eg countdowns to the vehicle’s next service. The following items are not acceptable fair wear and tear, because the driver has neglected to service the vehicle and/or failed to action warning messages from the vehicle management system: •

Brakes

grooved brake discs or drums caused by excessive wear or metal to metal contact from worn out disc pads.

› engine

seized or damaged due to running vehicle with insufficient coolant, oil or with broken internal components. * manual transmission eg clutch slipping, noisy clutch or gearbox, excessively worn or ineffective synchromesh.

Automatic transmission:

noisy gearbox or torque converter, abrupt gear changes, loose gear linkage.

Vehicle underside:

Any impact damage to the vehicle’s underside is not acceptable. Catalytic converters not working because of obvious abuse or damage are not acceptable.

Vehicle interior:

Passenger area, seats, headrests and trim:

The interior upholstery and trim must be clean and odourless with no burns, scratches, tears, dents or staining.

Carpets should not have holes. All seats originally supplied must be present. Interior fittings such as seat belts, rear view mirrors, courtesy lights, sun visors, door bins, etc, must be present, intact and free of damage.

Door aperture, boot, boot liner and luggage area:

Scratches on treads, sills and seals that reflect normal use are acceptable. Torn or split floor coverings and damaged surrounding trim panels are not acceptable. Accessories such as parcel shelves, load covers, restraining straps and nets must be returned with the vehicle.

Equipment & controls:

In-car entertainment equipment, telephones and navigation systems All original equipment, accessories and controls must be present and operate correctly (including satellite navigation discs, Secure Digital (SD) cards and remote units, headphones, electric vehicle charging leads, Bluetooth and other integrated systems). If accessories such as car telephones and other non-standard equipment have been wired-in or mounted on the dashboard, any holes or other damage must be neatly repaired when they are removed. Aerials must be left in place or the hole must be neatly repaired.

Customers: vehicle appraisal tips Please:

use this summary to appraise your vehicle against the BVRLA fair wear and tear standard prior to its return to the leasing company/service provider/dealership.

To avoid end-of-lease charges, you should arrange to repair unacceptable areas of damage before the vehicle is returned. Ensure the work is carried out to a professional standard by a repairer who can provide a transferable warranty for the work. Check the terms of your contract. Always point out any unrepaired wear or damage when the vehicle is collected to avoid problems later.

Carry out an appraisal of the vehicle 10 to 12 weeks before the vehicle is due for return.This will allow you to arrange to have any unacceptable wear and tear rectified.

* It is important to appraise the vehicle as honestly as you can.Be objective. Ask a friend or colleague to help you.

* Choose a time and place with good light. This is how the leasing company will examine your vehicle.Appraisals carried out in poor light invariably miss some faults. Before appraising the vehicle, make sure that it has been washed and is thoroughly clean but remember to allow time for it to dry. Water on the paintwork can mask faults. › Walk all the way around the vehicle and examine closely each panel, including the roof, bonnet, doors and body, for significant damage. Observe where the light is reflected differently from any dents and scratches. › Crouch or kneel down at the front and rear of the vehicle and look along the bodyline on each side.This will help you see scratches and dents that may otherwise be difficult to spot. * Inspect lamps, lenses, windows and mirrors for chips, cracks and holes.

* Check the tyres (including spare) for damage. Check that the wear on the tread across each tyre is even. Inspect wheels, wheel trims and wheel spokes for scratches and deterioration.

* Clean and valet the interior.

* Check upholstered areas for odours, tears, burns, stains and wear.

* Inspect all controls, including audio equipment and accessories – they should be present and fully functional. Of course, you may decide you want to keep the vehicle because you know its history. Contact your leasing company – it may offer this vehicle, or others like it, at a very attractive price. Customers: remember On collection, the vehicle must be in a safe and roadworthy condition with all appropriate keys, equipment, accessories and documentation available. Your leasing company/service provider will arrange collection of the vehicle at the end of your lease. All readily apparent damage and wear, irrespective of liability, will be documented when the vehicle is collected. You will be given the opportunity to agree with the condition of the vehicle at the point of collection. Your leasing company will then be able to carry out a full assessment of your vehicle to calculate what end-of-lease charges, if any, are payable.

* Ensure all your personal belongings are removed from the vehicle, eg sunglasses, music CDs from the player/multi-stacker, etc.Don’t forget to remove any item, including paperwork and other correspondence, that could reveal personal data about you, your family or friends.

* Remove your house key from the vehicle fob. Delete any personal contact and address information from the vehicle’s on-board communication system. If you cannot be present during the collection of the vehicle, or if other conditions, eg poor weather, prevent the vehicle from being inspected, your leasing company will issue you with a written condition report of the vehicle and advise you of any charges that may subsequently become due, together with summary details of how any charges are calculated. They will do this within four weeks of the return date of the vehicle.

* Discs and cards for satellite navigation systems should be left in the vehicle at return.

* The vehicle’s numberplate should be intact and the characters making up the registration mark must be of the specified size and font set out in Road Vehicles (Display of Registration Marks) Regulations 2001.

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