Towards the end of a lease term, you need to consider the condition of the vehicles you’re returning. Each car or van you hand back will be inspected and you’ll be charged for any necessary repairs over and above fair wear and tear.
But there are ways to make sure these end-of-contract costs are kept to a minimum. We’ll set out what you need to do to try to avoid getting hit hard in the pocket.
What are end of lease charges?
End of lease charges are additional fees you pay to cover extensive damage to a vehicle.
You won’t usually have to pay for minor scratches and damage. Anything above and beyond this, however, is likely to result in a fee.
Check with your leasing provider to see what’s covered in their fair wear and tear policy. Things that probably won’t be covered include:
- Missing items
- Broken glass
- Accident and impact damage
Why do end of lease charges exist?
Every vehicle depreciates in value through use and age. However, end-of-lease charges cover the loss in sale proceeds if a vehicle is returned in a condition that could significantly impact its value.
These charges can be a worry. But following just a few simple steps can help you keep costs to a minimum or even avoid them altogether.
- Considering potential repair costs when choosing your vehicles
- Keeping them in good condition during your lease period
- Inspecting your vehicles before you return them
Here are some things to bear in mind at every step of the leasing process that could save you significant sums in the long run.
Before signing the lease
- Weigh up the potential difference in costs. A vehicle that’s more expensive to lease could end up saving you money on end-of-contract costs. More robust cars and vans often depreciate in value at a slower rate than those that are cheaper to run.
- Choose your vehicles carefully. Repairs on most vehicles are fairly straightforward, but specialist repairs tend to be more expensive. Some makes and models offer an advantage over others when it comes to such costs.
During the lease
- Make careful checks. A weekly spot check of your vehicles can help ensure they stay in good condition throughout your lease. Make your drivers responsible for monitoring things such as tyre pressure and the condition of the bodywork.
- Take care of the small stuff. Fixing small dents or windscreen chips can seem like an unnecessary expense. However, they’ll help avoid bigger, more expensive problems and will keep your vehicles on the road.
- Set company policies for vehicle use. Some companies give their drivers a fair bit of leeway when it comes to personal use. However, this increased mileage and additional risk can lower the vehicle’s future value, as well as potentially raising the cost of your lease. Set tighter guidelines about personal use to reduce the risk of higher end-of-contract costs.
At the end of the lease
- Carry out detailed inspections. Before your lease period runs out, book time in for drivers to inspect their vehicles. Under the terms of the BVRLA’s Fair Wear and Tear guidelines, there may be a few repairs you can make to ensure cars and vans meet the necessary standards before they’re returned. Consider bringing in qualified inspectors who can suggest how to get your vehicles back into shape.
- Assess the cost of damages. If there are any faults that need fixing towards the end of the lease, consider reporting them to your lease provider beforehand. It’s worth weighing up the costs of repairing the vehicle ahead of the lease’s end, in which case you may actually cut the end-of-contract costs.
When your lease is almost up you may worry about the potential charges if your vehicles aren’t in tip-top condition. But as we’ve shown, taking simple steps before, during and at the end of your lease could see you make considerable savings when it’s time to hand vehicles back.
We always want to keep our customers’ end-of-contract costs to a minimum. Once vans and cars are returned to LeasePlan, we’ll carry out a number of checks and assess their condition under our Fair Wear and Tear policy. If there are any additional faults or damage outside that, you may be charged a fee.
However, we do our best to remove any worry by offering a repair matrix on our commercial vehicles – as well as a £150 waiver as standard. If the cost of any necessary repairs falls below that figure, you don’t pay a penny.
To find out more about how LeasePlan can help you to minimise concerns around end of contract, get in touch with our expert team today. Simply call us on 0344 493 5840 or fill out our online form.