What Do You Pay for Wear & Tear on a Leased Car?

by Samantha Kemp, Demand Media
    Your turn-in inspection can be strict and expensive.

    Your turn-in inspection can be strict and expensive.

    Leasing can be an effective way to keep a newer vehicle in good condition for a few years. When you turn in your car or truck, the dealership will inspect it. During this inspection, the dealership's representative will evaluate the vehicle for the amount of wear and tear that you have put on it, and may charge you fees if the wear and tear is in excess of reasonable use.

    Types of Leases

    The amount you pay for wear and tear damages may be different based on the type of lease that you have. An open-end lease is one in which you are required to pay the difference between the residual value of the vehicle and its realized value when you turn in the vehicle. The residual value of the vehicle is the purchase price after the lease term. You may receive a refund if the realized value is larger than the residual value if you have complied with mileage and the wear and tear standards. Closed-ended leases are more common than open-ended leases and require you to pay off the actual amount of any damages that exceed normal wear and tear at the time of turn-in.

    Normal Wear and Tear

    Most lease contracts allow you to incur "normal wear and tear" without having to pay an additional charge. These types of damages include the replacement of small items, such as tires, light bulbs and brakes. Your lease contract may designate that you are required to make these improvements as part of regular maintenance. Damages that are minor in nature or have a small diameter of damage, such as less than 1/2 inch, are also usually considered "normal wear and tear."

    Excess Wear and Tear

    Most leases charge you for any damages made to the vehicle. You may be held liable for paying the amount necessary to repair or replace the vehicle, whichever is cheaper. The terms of your contract might specifically state what the company considers to be "excess wear and tear" while other companies might charge for their subjective viewpoint of what is not "reasonable" wear and tear. Excess wear and tear includes damages such as scratches, a bad color match, bumper damage, sanding marks and body damage more than 2 inches in diameter. Ford Credit considers cracks, cuts, tears or stains that are more than 1/2 inch to be excess wear and tear; it also considers four or more dents or scratches that break the paint to be excess wear and tear. According to the repair shop BumperDoc, the average vehicle owner incurs $1,800 in excess wear and tear damages. However, your contract can stipulate that excess wear and tear charges be limited to the amount of three monthly lease payments.

    Ways to Save on Charges

    If you have not yet leased a vehicle, get as much information as possible and have it included in the lease agreement so that you know exactly what types of damages may result in extra charges. Consider purchasing wear and tear insurance when you lease the vehicle to help offset the costs. Regularly maintaining the vehicle can help you avoid some unnecessary fees. Have the vehicle detailed and inspected prior to the dealership's inspection of the vehicle. If a dealership representative says there is damage, ask a representative from the dealership for a written estimate of the damages and request estimates from other repair shops. Your contract may indicate that the dealership must have the repairs completed - if it does, ask the dealership to seek a second estimate before paying for these damages. If the dealership and your contract allow you to make these repairs yourself, keep the car repair receipts to prove that you paid for these services.

    About the Author

    Samantha Kemp has been writing professionally since 2009. Her articles specialize in personal finance, weddings, family, education, travel and entertainment. Kemp holds her Bachelor of Arts in economics and business from Hendrix College, as well as a Master of Arts in teaching from the University of Arkansas.

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