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Car Leasing Guide: How To Avoid End Of Contract Charges?

Swapalease BMW leases are regarded as some of the best lease deals on the market, however, several persons from across the world who have chosen the car lease option are constantly searching for more ways to make the most of their deals. One of the most common ways by which customers aim to make more from their lease deals is to avoid payment of end of contract charges.

To get you started on the money saving idea for the end of your lease contract, there are a few information you need to know. Read below to find out more on how to save yourself money by avoiding end of contract charges.

Watch out for fair wear and tear end of contract charges

De-hire charges alongside the fair wear and tear charges are important considerations to make at the start of the car leasing process. It is recommended that throughout the period for which you are in possession of the car, whether for the long or short-run, ensure that the vehicle is properly maintained and care for its physical appearance. Proper maintenance and care for the car will help you in reducing or eliminating De-Hire charges at the end of your contract.

What is fair wear and tear?

To get into the meat of the matter, you may begin to wonder what fair wear and tear is.

Fair wear and tear is the common term used to define the acceptable depreciation or deterioration in the condition of the vehicle over the time of lease. While this is termed deterioration, it is not to be confused with damaging of the vehicle. The term is used to describe the expected state of the car due to moderate or normal usage.

To ensure that you get the best deals, when leasing a vehicle, it is important that you carry out thorough inspection of the vehicle to ensure that it is in good condition thus minimizing the chances of having you pay for damages which you weren’t responsible for in the first place. Also, during the process of use, it is vitally important that you look after the car and ensure that it is in the best possible state at the end of the contract.

Photo by cek fidiah on UnsplashWhat are De-Hire Charges

De-Hire charges, also known as the end of contract agreement charges are those out-of-pocket cost you incur as penalty for using the vehicle abnormally thus leading to undetermined wear. A customer will be required to pay these charges upon estimation after their lease contract has ended. The charges in most cases are made for damages which are not specified in the fair wear and tear guidelines.

Basically, the fair wear and tear is aimed at helping you return the leased car in a condition that is correspondent to its age and expected usage.

Why do leasing companies have end of contract charges

End of contract charges are not only particular to fair wear and tear agreement breaches, in some case, charges may also be levied on customers who have exceeded their set mileage which may be as high as 36,000 or more over the period of the contract. For mileage exceeded, the leasing company charges the customer. These charges are however designed to compensate for the extra usage or depreciation value of the car based on the customer’s usage.

The de-hire charges are also necessary the leasing company will assume the car will have certain value upon drop off at the end of contract but if this does not match the expected value, such charges as this are used to make up the numbers.

How can I prevent De-Hire Charges?

There are several ways by which you can save yourself from end of contract charges. In most cases, saving yourself from the extra cost revolves around proper maintenance of the vehicle and returning it in the best possible condition ever,

To ensure that you are properly prepared for the end of your car lease term, it is recommended that you conduct proper and thorough inspection on the vehicle two to three months before the end of the contract and aim to fix all possible problems that may be beyond the fair wear and tear guideline.

Also, you can do a number of things including;

  • Ensure that the vehicle is in good working order
  • Inspect all tyres, including spares, and ensure that it meets the minimum legal requirement
  • Ensure that there is no rust or corrosion on any part of the car
  • Dents, scratches and others on the body panels should be adequately attended to
  • Avoid tears, burns or other damages on the upholstery.
  • Ensure that all original equipment are present and in good condition.

Written by Nathaniel Fried

Co-founder of Fupping. Busy churning out content and building an empire.

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