What Happens At the End of a Car Lease?

Here at Mercedes on Lease, we’re not just here to help you with finding the perfect lease deal but our Customer Service Team will help you with any in contract questions you have including what happens at the end of the lease.

We’ve put together this article with all of their top tips to help you understand what will happen at the end of the lease.

Deciding What You Want to Do

The first thing you want to do when you near the end of your lease agreement is to decide what you want to do. There are three options that might be available for you:

  • Returning the car at the end of the contract
  • Extending the lease agreement
  • Purchasing the vehicle

Some lease companies will not allow you to purchase the vehicle but will allow sale to a third party if you are interested in buying so we always recommend checking what the purchase options are from your funder before the end of your lease so that you know whether this is an option for you.

Additionally, it’s worth noting that a lot of funders will not allow any contract amendments in the final month of the agreement so you will need to contact them around six weeks prior to the end date as this will allow you time to complete the formal extension paperwork. Please note that the monthly rental price might increase as the extension will no longer take into account the initial rental.

If you are not entering into a formal extension but rather an informal one then you will not sign any paperwork to keep the vehicle for a set period so will not need to arrange this in advance, however not all companies will allow an informal extension and even if they do the funder can request the vehicle be collected at any time.

Understanding Fair Wear and Tear Guidelines

When you take out a lease you agree to return the vehicle in line with the British Vehicle Rental and Leasing Association’s (BVRLA’s) guidelines.

These guidelines are designed to protect the driver from being unfairly charged for expected wear to a vehicle over the contract length as well as to prevent the funders from having a vehicle returned to them in a much poorer condition than is expected.

You can contact your funder to get a copy of these guidelines at any time during your lease or find them online with a quick google search.

We recommend reading these guidelines at three points in the leasing process. The first is before you agree to take out a lease to make sure that you don’t expect to exceed these guidelines. Most drivers will not be likely to create more wear and damage than the guidelines stipulate but we still recommend checking them to make sure that you agree to them. The second time is a couple of months before you return the vehicle so that you can check your vehicle is in line with the guidelines and arrange for any necessary repairs to be completed. And the third time is the day before / of collection so that the guidelines are fresh in your mind when the vehicle is collected, and you can query any wear or damage that the inspection agent notes down which you believe is within the guidelines.

Arranging Collection of a Lease Car

You will need to contact the funder in order to arrange collection of your lease vehicle around two weeks before the end of the lease agreement as most funders have a seven to 14 day lead time on collections. It’s important to note that it will be your responsibility to arrange collection and the funder will not contact you to prompt this.

When you contact your funder they will usually ask for:

  • Preferred collection date (Monday – Friday)
  • Collection address
  • Collection contact name and phone number
  • Vehicle registration

Some may also ask for the vehicle’s mileage as well as these details.

We recommend that if you are able to be present for the collection of the vehicle then you are as this allows you to add any comments to the collection report and you will be the one to sign and confirm it is correct. However, most funders will allow a third party to hand over the vehicle provided they have written permission from you to do so.

Please note that although you might be able to request an am or pm collection slot most funders will not guarantee a specific time and advise you be free for collection all day to ensure you’re able to participate in the handover.

What Happens When a Lease Car is Collected?

The vehicle will be inspected prior to collection and the agent will note any defects or wear to the vehicle and whoever is present for this will need to sign the handover documentation which will include a copy of this report.

Although inspection and collection will usually take place at the same time some funders will use separate agents to complete the inspection and this may happen at different times if they are having a particularly busy period. This is another reason to make sure that you are free during the entire day to complete the inspection or collection process yourself, this can just be a case of being able to go out for half an hour or so.

Once you’ve signed to confirm the collection report and added any comments that you have the collection agent will then take all keys for the vehicle and take it away. The car will no longer be your responsibility and they will take it to the funder’s preferred location.

After the vehicle collection report has been reviewed your funder may issue you with additional charges for any excess mileage or excessive wear and damage to the vehicle. They will usually email a breakdown of these charges to you along with a copy of the inspection report. If you want to challenge any of these charges then you will be able to discuss them with your funder at this point.

When to Find Your Next Lease Car

With the long lead times the current market is experiencing we’d advise getting in touch with us about six to four months before the end of your lease agreement to make sure that we can try and tie your new Mercedes delivery in with the end of your current contract.

Whilst we’ll do everything within our power to find your perfect car in a convenient timeframe because of the long term impact of Covid-19 and the shortages caused by the Ukrainian conflict there may be a time when the vehicle might not be ready in line with collection but we will keep you as updated as possible as the order progresses.

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