The timeline for the last six months
A personal or business contract hire agreement is a fixed-term rental. When the term ends you do not own the car and there is no balloon payment to settle, so the end of the lease is mainly a handback process.
Most funders write to you around 90 days before the agreement ends. That letter normally asks you to confirm the final mileage, offers a collection window and explains the handback conditions. The exact timing varies by funder, so your own agreement is the document that counts.
| When | What usually happens | What you should do |
|---|---|---|
| 6 months before | Nothing formal from the funder, but the end date is close enough to plan around | Check the current mileage against your allowance and decide whether you want to keep, extend or replace the car |
| 4 months before | Time to decide on a replacement, because new orders can take weeks or months to arrive | Check mileage and condition using the sections below |
| 90 to 60 days before | Funder contacts you to confirm the end date and arrange collection | Reply promptly and confirm the address, contact number and preferred collection date |
| 2 to 4 weeks before | Valet, repair and paperwork period | Gather keys, handbook, service history and any removable items |
| Collection day | Driver inspects the car, often with photos, and records the mileage | Be present if you can and keep your own photos |
| 1 to 4 weeks after | Final invoice or confirmation that there is nothing to pay | Check every line against your own records |
Collection: how the handback works
The funder usually appoints a third-party collection company. A driver arrives at the agreed address, checks the car and takes it away on a transporter or drives it back. If you are not there, you generally cannot dispute what the driver records on the day, which is why being present matters.
Before the driver arrives, the car should be reasonably clean, the fuel level should be sensible and all personal items removed. A dirty car is harder to inspect, and mud or dust can hide marks that you would prefer to be assessed fairly. The driver will note the odometer reading and any damage on a condition report.
Collection normally includes a signature from you. Read the report before signing and add comments next to anything you disagree with. A signed report with no comments is much harder to challenge later.
If the car cannot be collected on the agreed day, ask for the new date in writing. Delays caused by the collection company are not normally your responsibility, but you should still keep the car insured and roadworthy until it has gone, because the agreement stays in force until the funder confirms the handback.
The inspection and fair wear and tear
Condition is assessed against the BVRLA fair wear and tear standard, which most leasing companies in the UK follow. The standard separates ordinary use, such as light scuffs and small stone chips, from damage that a funder can charge for, such as deep scratches, dents that have broken the paint, or tyres below the legal limit.
The test is whether the marks are consistent with normal use for the car's age and mileage. A three-year-old car with 30,000 miles is expected to look used, but it should not look neglected. The standard also covers interior condition, glass, wheels, lights and the presence of a spare wheel or repair kit, plus keys and documents.
You can walk around the car yourself in daylight before collection using the site's fair wear and tear checklist. It lists the areas inspectors look at, from tyres and wheels to keys and documents.
Excess mileage charges
Every lease has a mileage allowance, set when the contract is written. If the final odometer reading is higher than the allowance for the term, the funder bills the extra miles at a pence-per-mile rate fixed in the agreement. The rate is often somewhere between a few pence and well over 20 pence a mile depending on the car, and it is written into your paperwork so you can look it up.
As a simple illustration, 2,000 miles over the allowance at 10 pence a mile would be a charge of £200. At 15 pence a mile the same 2,000 miles would be £300. Larger or premium cars tend to carry higher rates because the funder's depreciation per mile is higher.
Some funders run a small tolerance before charges start, but this is not universal. You can check your position at any time with the excess mileage calculator and see where you stand well before collection.
Other charges that can appear
Damage is the most common source of extra invoices, but it is not the only one. Funders may also charge for missing keys, a missing service history, a missing locking wheel nut or a failed MOT, depending on the agreement. Maintenance-inclusive deals cover servicing but not damage.
Early termination is a separate matter. If you hand back before the term ends, the funder normally asks for a large proportion of the remaining rentals. This is a contractual rule, not a handback fee, and it is worth reading the early termination clause in your agreement before assuming you can simply stop.
- Missing or damaged keys and key fobs
- Absent or incomplete service history where servicing is the customer's responsibility
- Warning lights on the dashboard or a failed MOT
- Missing handbook, spare wheel, repair kit or locking wheel nut
- Smoke, pet or strong odour damage to the interior
- Non-standard modifications or aftermarket parts fitted without consent
Extending, upgrading or walking away
If you like the car, many funders will offer an extension of a few months, sometimes on a rolling monthly basis. The rental in an extension is usually similar to your existing one, though it can change, and the mileage allowance is normally pro-rated. An extension is useful if a replacement car is delayed, but it is not an automatic right.
If you want a new car, an upgrade means ordering a new lease. The old car is handed back as described above, and you should allow for lead times, which can be long for popular models. Starting the search around four months before the end date is sensible for most drivers.
If you simply want to stop driving, you hand the car back and the agreement ends once the final invoice is settled. Leasing a car is not a route to owning it, so there is nothing to sell. Short gaps can be covered by a short-term car lease, and the how it works page explains the wider structure of contract hire.
Preparing the car in the last month
A little preparation costs far less than a disputed invoice. Wash the car properly a day or two before collection and do it in daylight, because that is when scratches, dents and kerb marks are easiest to see. Photograph every panel, each wheel, the windscreen, the interior and the odometer.
Decide which marks are worth repairing. Small cosmetic repairs on a single wheel or a chipped panel can cost less than the funder's charge for the same damage, but expensive bodyshop work on borderline marks is rarely worth it. Smart repair specialists can often fix a scuffed alloy or minor scrape, and you can compare their quote with the funder's published price list, which should be in your handback guide.
Do not service or repair the car in a way that breaks the agreement. If your contract includes maintenance, use the funder's approved network. If it does not, make sure the car has a documented service history, as a missing record is a common reason for a charge.
- Locate every key, fob and the locking wheel nut key
- Gather the handbook, service book and any tools supplied with the car
- Remove personal items, dash cams and phone mounts, and make good any holes left by fitted accessories
- Check tyre tread and condition, including the spare or repair kit
- Clear any dashboard warning lights and check the MOT date if the car is over three years old
- Photograph the car and the odometer with timestamps
A worked example of an end-of-lease bill
To see how the charges stack up, take a three-year lease with a 30,000-mile allowance. At handback the odometer shows 32,400 miles, so 2,400 miles are over the limit. At 9 pence a mile the excess mileage charge is £216.
The inspector then notes a scuffed alloy wheel, a small dent that has cracked the paint and a missing locking wheel nut key. If the funder's tariff were £90, £110 and £25 for those three items, the damage and missing-item total would be £225, and the overall invoice £441. These figures are illustrative only, but the structure is typical: mileage is calculated first, then each condition item is priced separately.
Now compare that with preparation. Repairing the alloy for £60 with a specialist and finding the missing key before collection could cut £115 from the bill, and the paint dent, if the repair costs less than £110, could cut it further. A standard bill is rarely avoidable in full, but it can usually be shrunk by dealing with the items you can see.
Finally, check the invoice for items that should not be there. Charges should refer to specific parts, include photos and match the agreement's tariff. If a line says only 'general damage', ask for a breakdown before paying.
What to do if you disagree with a charge
Start with the funder's complaints process. Ask for the inspection report, the photos and the price breakdown, then compare them with your own photos and the fair wear and tear standard. If a charge looks higher than a reasonable repair would cost, ask for an itemised invoice or the repair quote.
If the funder is a BVRLA member and you cannot agree, the BVRLA conciliation service can review the case. It looks at the condition report and evidence and offers a recommendation. Keep every document, including collection paperwork, emails and photos with timestamps, because the outcome depends on the evidence.
Finally, remember that an end-of-lease invoice has to reflect genuine, assessed damage. Charges for a fair wear item or an incorrect mileage figure can and should be challenged.