Auto Loans

How to Avoid Car Leasing Charges

how to avoid car leasing charges

When you turn in your leased car, you may get hit with extra charges. Here are explanations of a few common extra charges, and how to avoid them.

Excess mileage charges apply to any miles you’ve put on the vehicle over and above the predetermined contractual limit, which is typically between 10,000 and 15,000 miles per year. The best way to avoid having to pay for excess mileage is to take the time to estimate how much you will drive the car, including any weekend and holiday use, before you sign the lease. Then purchase extra miles up front. Typically, it is less expensive to do this than to pay extra mileage at the tail end of a lease.

Excess wear and tear charges compensate the lessor for wear and tear to the car beyond what is deemed normal during the time you are driving the car. What constitutes normal wear and tear should be clearly defined in the lease. Do a bit of research before you sign, to ensure that the definition is reasonable compared to other leases. If the definition is vague or overly strict, find another lessor.

The best way to avoid excess wear and tear charges is to make sure that you follow the manufacturer’s maintenance schedule for your car and have any problems fixed right away. You should also wash a leased vehicle regularly and keep the interior clean, since the car’s appearance, as well as its state of repair, will be assessed when you turn it in.

If you have caused excess wear and tear, you are responsible for compensating the lessor for the resulting loss in the car’s residual value. Typically, excess wear and tear charges are limited to the sum of three months’ worth of monthly installments on the lease. If, however, you have an open-ended lease, you may be required to pay more – so make sure you get a closed lease.

A disposition fee is sometimes charged if you do not buy the car at the end of your lease. Check to see that the lease contract does not impose a disposition fee before you sign.


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