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5 Fees to Watch for When Ending Your Car Lease

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Read time: 6 minutes 

While the prospect of getting a new ride at the end of your lease is exciting, there are several potential fees that can catch you off guard.

The Consumer Leasing Act of 1976 stipulates that all leasing costs — including end-of-lease charges — should be explicitly disclosed in the lease contract. 

Of course, that doesn't mean they always are.

Dealerships still try to surprise lessees with extra charges, regardless of whether the car is being turned back in or bought out.

Here, we’ll cover several hidden end-of-lease fees so that you enter the end-of-lease process empowered rather than caught off guard.

Table of Contents
1. Mileage Overage Fee
2. Lease Disposition Fee
3. Excessive-Wear Fee
4. Early Termination Fee
5. Lemon Law Fee
Other Dealer Fees

Standard End-of-Lease Fees 

Standard fees are almost always spelled out in a lease contract, but can still surprise people on their final bill. 

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Mileage Overage Fee

Car lease contracts usually stipulate a mileage limit for the duration of the lease, and any mileage over that limit can result in additional charges.

The standard is 36,000 miles for a 3-year lease, or an average of 12,000 miles/year. If you've driven more miles than allowed in your lease agreement, you could be charged anywhere from 10 to 30 cents per mile.

Those fees can really add up, and may surprise you if you don’t go into your lease-end transaction prepared for the cost.

Let’s say your lease contract allows you to be charged an extra $0.20/mile exceeding your mileage limit. That's not much, right? But if you drive even an extra 5,000 miles over your limit, that’s an additional $1,000 that you’ll owe the dealership.

And remember, that’s not an extra 5,000 miles/year — that cost is for an extra 5,000 miles over your entire lease period. If your lease term is 3 years, you’d only have to put about 1,600 extra miles/year to reach that cost.

To avoid this fee: Consider buying additional miles upfront when you lease the car or look into mileage forgiveness programs offered by some leasing companies.

Or, if you love your car but you've gone over your mileage? Buy it out for ownership through one of our financing partners. No overage fees due and no dealership trip necessary.

If you know you'd like to keep your car at the end of your lease, you can buy it out and finance a purchase!

 

If you're ready to chat through your options with a dedicated financial advisor, give us a call at 888-307-5197 to get in touch with one of our lease-end experts.

 

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Lease Disposition Fee

disposition fee is an administrative charge supposed to help cover the cost of putting your returned vehicle on the used-car market. It’ll be spelled out in your lease contract, and often comes out to about $300–$500.

Some dealerships or manufacturers will waive the fee, but only if you trade your leased vehicle back in for another lease or purchase.

To avoid this fee: Some companies waive this fee if you lease or purchase another vehicle from them. Check your lease agreement to see if that option applies to you and your vehicle.

Note that if you decide to purchase the vehicle at the end of your lease, you may be required to pay a purchase option fee. To avoid this fee, you can negotiate with the leasing company to waive it or consider financing the purchase through a third-party lender like Lease End.

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Excessive-Wear Fee

Car lease contracts should allow for some normal wear-and-tear that happens over the course of the lease, but you’ll be charged for any excessive damages.

Some leasing companies publish descriptions of what they consider excessive or normal, like this Excess Wear and Use guide from Toyota. If you do have access to a guide, review it.

And in any case, make sure you’re informed about how the inspection will go down. It’s best practice for a dealership to hire a third-party inspector to avoid subjectivity, but they may not be planning on it.

To avoid this fee: Consider getting a pre-inspection before returning the car. Then you can address any issues beforehand or consider getting them fixed independently, which might be cheaper than charges from the leasing company.

Read More: Can I Repair a Leased Vehicle By Myself? 

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Early Termination Fee

If you decide to end your lease early, you will almost certainly be charged an early termination fee.

This fee is typically equivalent to several months' worth of lease payments.

To avoid this fee: Consider transferring your lease to someone else or negotiating with the leasing company to find a mutually agreeable solution. 

Dealership-Based End-of-Lease Fees 

These other fees are a little more out of the ordinary — and good examples of how dealerships have can utilize ambiguity to charge more to consumers.

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Lemon Law Fee

Lemon Laws hold manufacturers responsible for defective vehicles. These laws protect drivers who purchase a lemon, or a car that is faulty at the time of purchase.

That being said, Lemon Laws vary by state, so implications of returning a leased lemon can depend on where you live.

Some dealerships have been known to charge a fee when drivers return a leased vehicle that is a lemon, or in other words, a car that has experienced significant mechanical issues during the lease term.

In 2022, a Nissan dealership in Westbury, NY, was investigated by a local news station and caught charging customers a “Tri-State lemon law fee” at the end of leases “to cover [their] responsibility with the state.” If this sounds fishy to you, you're spot on — New York (WABC) journalist Nina Pineda heard about this fee and was just as suspicious.

Pineda went to the New York Attorney General about it and they confirmed that this has never been a state-stipulated fee. She then confronted the dealership manager about the fee, and the dealership ended up refunding lease-end charges to multiple customers totaling $31,500.

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Other Dealer Fees

Additional dealership fees can vary widely to include any of the following:

  • Administrative fees
  • Vehicle inspection fees
  • Paperwork fees
  • Unnamed "dealer fees"

Investigative Reporter Jeff Weinsier (with WPLG Local 10) spoke with multiple people with leases ending in Florida, and discovered some recurring problems.

At a Volkswagen dealership, at least two lessees were presented with a "dealer fee" and a "mechanic-certification fee" when they tried to buy out their leases.

One of these consumers said the dealership would not sell his leased car to him without these two fees paid, which would come out to almost $2,000.

The other lessee, a local attorney, filed a complaint with the county about this—he won, and didn’t have to pay.

Knowledge is Power

When returning a car at the end of a lease, some of these fees are, unfortunately, unavoidable.

But the more you know, the better you are positioned to take control of your leasing experience — and to avoid being taken advantage of.

For the most proactive approach possible, take these tips into account before ending your lease:

  • Review your lease agreement to understand what fees may apply in your situation.
  • Discuss any fees with the dealership upfront and try to negotiate or waive them if possible.
  • Schedule a pre-inspection of your vehicle before returning it to identify any excess wear and tear that may result in charges.
  • For your next lease, consider working with a more reputable dealership with transparent pricing practices to avoid unnecessary fees.

By being proactive and informed, you can help ensure a smooth and cost-effective lease return process.

Skip the Hidden Fees and Utilize Lease End

If these fees (or the prospect of haggling with the dealership) have you stressing about the end of your car lease, don’t worry — we’ve got you covered. 

With Lease End, you can buy out your leased car through one of our financial partners and skip all the dealership fees. Plus, you’ll get to keep all the equity you’ve built in your leased car.

If you're ready to chat through your options with a dedicated financial advisor, give us a call at 888-307-5197 to get in touch with one of our lease-end experts.

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