What happens at the end of a lease

A lease ends on a known date, which is its great advantage. What happens on that date is set out in the contract you signed at the start, and almost every unpleasant surprise comes from reading it for the first time in the final month.

You have three options. Return the car and walk away. Return it and lease or buy something else. Or buy the car yourself at the residual value written into the contract.

Before the return there is an inspection, usually arranged a few weeks ahead so you have time to act on it. It measures wear against a published standard: tyre tread depth, glass chips, dents above a certain size, scratches that a coin will catch. Normal wear is included. Beyond-normal wear is charged, and the charge is almost always higher than fixing it yourself beforehand.

Then the arithmetic: excess mileage at the per-mile rate you agreed, any beyond-wear charges, and a disposition fee if your contract has one.

The move that saves the most money is the boring one. Get the inspection early, take the list to your own shop, and fix what is cheaper to fix. Deal with tyres and windscreen chips, which are the two most commonly charged items, before the inspector sees them.

And if the car is worth more than its residual, buying it or selling it yourself is worth checking rather than assuming.