Choose the right option for you at the end of your car lease.

You might be able to keep your vehicle by hire or by owning outright, or you may have to start a new lease with a new vehicle.

What Happens at the End of a Car Lease?

Are you coming to the end of your car lease, and wondering what the next step is? Although your car lease company should contact you a couple of months before the end of your lease, you are expected to know when your lease is due for renewal, and to arrange for the car to be picked up yourself. From there, you can take the opportunity to compare car finance deals and find a new arrangement that is right for you. This could be another lease with the same company, a lease with a different company, or even buying your own car outright.

In this guide:

Different types of car lease

The type of car lease you have affects what happens at the end of your lease. There are three main types of car lease, depending on what type of car finance deal you have chosen:

Contract hire

This is the most popular form of car lease, and allows you to drive a vehicle for a set period of time without actually owning the vehicle. Contract hire usually consists of a monthly rental plan that lasts the length of the contract, and when this ends the vehicle is returned to the hire company. Sometimes you can extend your lease to keep the car for longer, but this is not always the case.

Personal contract hire

This is very similar to contract hire in that you can drive the vehicle for a set amount of time, but never actually own it. However, this form of contract hire is only available to private customers. When a personal contract hire agreement comes to an end, the customer will return the vehicle to the leasing company, after which you can take out a new lease.

Personal Contract Purchase

The main difference between this and the other types of car lease is that you have the option to take ownership of your vehicle at the end of your lease, by making a balloon payment. This voluntary payment is decided at the beginning of your lease, and allows you to keep your hire vehicle if you want to. Alternatively, if you decide you do not want to keep the vehicle then you can also return it to the car lease company at the end of your lease.

Can I extend my lease?

The option to extend your lease depends on your car lease company, and what kind of car lease you have. Usually for contract hire and personal contract hire agreements, there is an option to extend your lease for a limited period of time. Your car lease company may charge you to extend your lease or not allow you to at all. For personal contract purchase, the option is to pay for ownership of your vehicle. Contact your car lease company if you would like to extend your lease, to find out if this is an option and how it works if you can.

What happens when your lease car is collected?

It is your responsibility to arrange the collection of your car by the car lease company. To have the lease car collected, you will need to know the car’s registration number, your address and telephone details and a preferred collection date. In some cases you can arrange for collection of your old car and delivery of your new one in the same day, but you will need to arrange this with your car lease company.

Will there be extra charges?

Your car lease company will not be expecting a brand new car to be returned to them - a little wear and tear is normal. However, if you have damaged the car beyond wear and tear, it is likely that you will incur damage charges. If you have caused any damage from accidents, especially dents, scratches and windscreen chips, you should get these repaired before returning the vehicle to the car lease company. Getting repairs done yourself will no doubt be cheaper than paying the damage fees decided by the car lease company.

Another extra charge to watch out for is for exceeding your mileage limit. Lease deals include a mileage cap - usually between 8,000 and 10,000 miles per year - and if you go over this, you will be faced with a potentially expensive fee. You will have been made aware of the excess mileage charge when you first take out the car lease, but it is important to keep this in mind as your lease comes to an end.