Car Leasing – How To Avoid End Of Contract Charges

Let’s start by finding out exactly what is meant by Fair Wear And Tear

Maintaining your vehicle and caring for its physical appearance will help to reduce or eliminate De-Hire charges at the end of your contract. With Car Leasing, it is vitally important that you look after your lease vehicle, in order to minimise the possibility of end of hire charges which may be imposed by the leasing company. Fair Wear and Tear is a term used to describe the acceptable deterioration in the condition of a vehicle due to normal usage. It should not be confused with damage to a vehicle caused by inappropriate use, negligence or impact.

De-Hire Charges (or End of Lease charges as they are also known) are charges made by the leasing company if your vehicle is returned outside the Fair Wear and Tear guidelines and is in need of repair or renovation. Basically, your vehicle should be in a condition relative to its age and mileage with no mechanical or visible defects.

So why do we have End of Contract Charges?

End of Contract Charges are meant to compensate the leasing company if a vehicle is returned in a poorer condition than expected, taking into account its age and mileage. In other words, if the condition of the vehicle cannot be considered Fair Wear and Tear, there is likely to be a charge.

De-Hire charges are necessary because in setting the monthly rental for your contract, the leasing company assumed that your car would have a certain value when it disposes of the vehicle at the end of the lease. If you do receive end of lease charges, you may be able to negotiate with the leasing company if you think they are unfair.

So how can you prevent De-Hire charges?

Your lease car must be returned in a safe, legal and reliable mechanical condition, capable of passing an MOT test, with all safety features such as parking sensors in working order. It should also have no serious physical damage. You should thoroughly inspect your vehicle two or three months before it is due for return. This will give you time to rectify any problem you think might be beyond Fair Wear and Tear. Don’t forget to arrange for your personal number plate (if you have one) to be transferred to your new vehicle, as this could take a few weeks.

There are a number of specific things you should ensure to minimise end of hire charges:-

  The vehicle should be in good working order in all respects
  All tyres, including the spare, must meet the minimum UK legal requirements
  There should be no rust or corrosion on any painted area
  Visible dents and deep scratches on body panels should be repaired
  There should be no tears, burns or other damage to the upholstery
  All original equipment must be present and operate correctly
  The exterior of the vehicle should be cleaned to facilitate inspection
  The interior of the vehicle should be valeted and cleared of rubbish
  The Service Book should be date-stamped by an authorised service centre
  The two sets of keys that were originally supplied should be available
  All Documentation including Service Book and Manual should be in the vehicle

As regards bodywork damage, what is considered Fair Wear and Tear does vary between leasing companies, so you should check the terms and conditions of your lease provider. As a general rule, small areas of chipping, including door edges, are usually acceptable, as are slight scratches and abrasions provided primer or bare metal is not showing. The British Vehicle Rental & Leasing Association (B.V.R.L.A.) has set out an industry Fair Wear And Tear standard to help drivers of leased and financed cars to reduce or eliminate De-Hire Charges.

Vehicle Collection at End of Contract will be arranged by your leasing company (usually without charge), and any obvious damage will be documented. It’s best to be present when the vehicle is collected, so you can make sure that you agree with the report on the vehicle condition at the time of collection.

By: Howard Mostyn

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Howard Mostyn runs a Car Leasing Consultancy business in the UK. and offers free advice on Car Leasing, via his website Car Leasing Guide. He is giving a FREE copy of his eBook "Car Leasing Secrets - How To Get The Best Deal Possible On Your Next Lease!" to anyone who subscribes to his Car Leasing Blog.