As you may have experienced firsthand, dealerships love to surprise their customers with fees. If you’re leasing a car (or at least thinking about it), you should know about the Consumer Leasing Act of 1976. This Act 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 5 ‘hidden’ end-of-lease fees. Three of these fees are almost always spelled out in a lease contract, but can still surprise people on their final bill. The other two are a little more outrageous - and good examples of how dealerships have tried to ‘pull one over’ on consumers to charge entirely made-up fees for profit.
1. Mileage Overage Fees
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.) 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.
2. Disposition Fees
Up second is another “should have been disclosed, but can still make your jaw drop” fee. A 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.
3. Excessive-Wear Fees
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 a guide for what they consider excessive or normal, like this one 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.
4. 'Lemon Law' Fees
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, you’ve got good instincts – 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.
5. '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.
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 or sell it to us and skip all the dealership fees. Plus, you’ll get to keep all the equity you’ve built in your leased car.
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