Bringing Car Back From Lease
Getting the car back to the dealership at the end of the lease might seem the simplest thing. You’d think that it’s enough just to take the car back and get another one but, in reality things are a bit different. You must be very careful and know about all the charges that will come at the end of the lease. When you made the lease contract, the dealer simply “glided over” most of these fees that are usually in fine print. I hope you didn’t because signing any kind of contract they are obliged to follow all the terms specified in the contract.
These fees are not negotiable since the leasing company placed them to protect their investment in each of the leased vehicles. Never trust a salesman that tells you not to worry about the procedure at the end of the lease. Like I said, it’s not as simple as dropping off the car and go. There are three types of fees that you need to take care of when the lease ends: the Disposition fee, the Excess Mile fee and the Vehicle Condition Assessment.
The disposition fee has the role of offsetting the bank’s expense when the dealership agrees to sell the vehicle at the end of the lease. These expenses are composed of vehicle reconditioning costs, several inspection fees, transport costs, storage and auction fees, and all the funding costs that have to be supported until the vehicle is sold.
This is one of the fees that cannot be changed, argued about, negotiated and it remains the same from the beginning till the end of the lease. Since it is not generating any profit for the dealership, don’t bother negotiating it with a dealer. To avoid any kind of surprises you should always ask for the amount before signing anything.
Another factor to be considered is the Excess Mile charge. The type and payments of your lease are directly related to the number of miles you get to drive per years. In case you exceed the number of miles that are given for use (usually 10.000), that directly affects the Residual value of a car. For each mile you go over 10.000 each year, the residual value of the car drops a little more. For example a car that’s three years old and has 30.000 will value a lot more on the market than one that has 40.000 miles.
People usually get tricked into accepting a small lease payment for their car which also implies a limited number of miles. The problem is that many tend to exceed that number of miles and automatically attract giant fees at the end of the lease. Think about it, you can be charged about 20 cents for each excess mile over 10.000. Therefore it is a lot better to get a bigger mileage plan, of 12.000 or 15.000 and pay a little more on the lease than to attract that massive penalty at the end of the lease (which you have to pay money-down).
On the other hand, Excessive wear is not that simple to calculate. The problem with the “wear and tear” clause in the contract is that it’s very undefined and sporadic. What you consider to be normal use might be different than what the dealer thinks. Most charges usually come from broken knobs or missing components, visible damage on the body or trim. Cuts, tears, burns, or other visible damage sustained by the carpet, interior or upholstery, worn out tires, and poor quality repairs. All these will come out of your wallet.
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