Five Ways to Save Money When Your Automobile Lease Ends

Submitted by: James Salter, Owner, Business Writing that Works

Paying excess mileage charges when an auto lease ends is something most consumers take care to avoid. But many of these same careful lessees get an unhappy surprise at turn-in because of other charges and costs they failed to think about.

Consider what steps you can take to avoid charges when the auto is turned in. What you think are minor dings, dents or scratches can end up costing you a lot. "When you lease a car, the sticker shock comes at the end, not the beginning," said Jack Gillis, a spokesman for the Consumer Federation of America and author of The Car Book, a buyer's guide.

A Changing Market

Consumers love auto leasing because it offers an easy way to get into a new car with a lower down payment and lower monthly payments than financing a vehicle to be purchased. This is because the lessee is only paying for the amount of the car's value that is used. Typically, people lease for three years, so they only pay for the first three years of a car's life — which are definitely the car's best years.

Before tighter credit and lower residual values, car dealers also loved leasing because it brings customers back into the dealership at the end of the lease, every two or three years. Also, because many consumers are confused by leasing terms, dealers can more easily take advantage of them. Particularly in difficult economic conditions, leasing companies are looking for every way possible to improve their revenues.

These changes and tighter credit conditions make it more difficult to lease and have caused leasing companies to be more stringent in their lease-end requirements. Lease contracts typically run 24 to 36 months, and consumers usually turn in their vehicles at the end of the term.

That leaves the auto maker on the hook to sell vehicles that may have declined significantly in value compared to assumptions made at the time the original lease was signed. And that means lessors are going over returned vehicles with a fine-tooth comb to get all the extra charges they can.

How Do You Avoid Extra Charges at The End of The Lease?

At the top of the problem area are excess wear-and-tear charges.

These fears are not unfounded, according to Tarry Shebesta, president of Automobile Consumer Services Corp., "As the leasing market tightens up, banks are looking for a way to make money from returned cars. They will be more critical about wear and tear and any deviations from the lease contract."

Bottom line: Keep the car at a condition above and beyond "average wear and tear" to avoid penalties

5 Ways to Save Money at Turn-In

Here are five useful tips to keep in mind before and during the lease to prevent dings to your wallet as you say goodbye to your leased vehicle:

1. Stay within the mileage limit. 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. If you have really high mileage fees, consider selling the car yourself rather than paying the penalty.

2. Treat the car like it was your own. Elaine Littwer, legislative coordinator of the National Vehicle Leasing Association, says that it’s important for consumers to understand that damage reduces the resale value of a vehicle. "The 'I don't own it and I don't care' attitude ends up costing them money."

3. Make sure the vehicle is serviced at the required intervals. Keep all maintenance records to provide proof of service and repairs.

4. Have the vehicle serviced just before you turn it in. This will ensure that it has no major problems and will provide a final third-party record of condition.

5. Any dents should be removed by a body shop rather than turning the car in with the damage. Repair charges covered by lease protection or paid privately are not subject to some of the expensive mark-ups charged by leasing companies.

Following these simple steps and Investing a little time and money during the course of your lease can ensure your peace of mind and protect your bank account when your leased car’s Judgment Day arrives.

James Salter is the owner of Business Writing that Works, a professional writing resource for business articles, reports and white papers. He may be contacted at jsalter2@businesswriter.us or www.businesswriter.us.