Car lease is up – now what?

There is a dirty little secret in the car industry that hides one of the most powerful end-of-lease options for us.

Just about every car leasing company is SUPER excited to help us once our lease is over.

About 90 days before our lease ends, they suggest we research our options.

They always give us these 3 end-of-lease options:

car lease is up GM turn in guide

1) Trade in our leased car for another leased car…
2) Purchased our own leased car…
3) Walk away from the lease and turn our car in.

Option #1: Trade our leased car in for a new leased car

Car dealerships will do everything in their power to steer us into option #1. They want us to turn in our car AND lease a new car from them.

The reason why is simple economics. This is how dealerships make TONS of cash.

First, they will exploit the option to buy out our lease when we turn it in. Because the “Purchase Option at End of Lease Term” is almost always thousands of dollars less than market value.

Even better, off-lease cars are usually in perfect shape. Dealerships know we fear damage penalties and over-the-mileage fees. As a result, we turn in our cars in (usually) flawless condition. So car dealers resell our off-lease cars with a minimal investment – a good detailing and cheap new tires.

In the end:

These car dealers buy our end-of-lease car and flip it on their lot for thousands and thousands in easy profit.


Car dealers make thousands of dollars more selling us financing, extended warranties – even life insurance.

But here is the best part of a lease turn in – for the dealership:

We will probably get a terrible new lease deal.

Sure, leasing seems great because of the advertised lower monthly payment.


Car dealers almost never discount the cost of a car. They lease us a new car at the full MSRP sticker price.

We let them get away with this, because we think we have to. We assume that leasing a car does not entitle us to a discounted price. (This is a whopper of a lie. And I have a system that reveals how to get car leases at the absolute lowest price here.)

When car dealers lease us a car at the full MSRP sticker price, they bank at least $4,000.00 in pure profit (or a lot more)…


The interest we pay to borrow money on the lease (a.k.a. the “Rent Charge“) is at least $2,000.00 higher than it should be (usually a lot more)…

Even worse:

We are charged full price for every “fee” imaginable – adding another $1,000.00 (or more) to their bottom line.

In the end, car dealerships walk away with well over $10,000.00 in pure profit when we turn in our car AND lease a new car.

This is the REAL reason for the big push to get us into leasing a new car.

Option #2: Buying our off-lease car

Every financial guru on the planet tells us that buying a slightly used car makes the best financial sense.

And up until just a few years ago, this was solid financial advice.

But nowadays, this is outdated information.


Because cars are no longer made like they used to be. And this is mostly good news…

Car manufacturers have pledged to have zero deaths by the year 2020. That is just a few years away. And they have loaded the cars we drive with a dizzying array of safety equipment. This includes expensive airbag systems and complicated computerized safety sensors…


When these safety systems malfunction, they are super expensive to fix.

And of course, they are designed to fail after the warranty expires via “planned obsolescence”:

Even worse:

The fine print in warranty agreements protects insurance companies against claims on these expensive failures.

And even if our 3-year old car does not break down, it costs a fortune to maintain starting just after our lease ends.

See how the cost of maintenance jumps on the most popular cars sold in the USA once a 3-year lease ends:

Subaru Outback
total cost ownership Subaru Outback

Subaru Impreza
total cost ownership Subaru Impreza

GMC Terrain
total cost ownership GMC Terrain

Volkswagen Jetta
total cost ownership Volkswagen Jetta

Ford Mustang
total cost ownership Ford Mustang

Volvo XC90:
total cost ownership Volvo XC90

Mini Countryman
total cost ownership Mini Countryman

BMW 3 Series
total cost ownership BMW 3 Series

I could go on and on…


It gets even worse for hybrids and all-electric vehicles

These cars have super expensive battery packs that are certain to fail just as our lease ends. Even though car manufacturers guarantee them for up to 100,000 miles, they almost never honor their electric-pack warranties.

Of course, we all know one of the biggest benefits of leasing is that we are always driving a new car that is usually super reliable and under warranty.

On the flip side:

We all know cars nickel and dime us about 3 years in – just as our lease ends. This is when expensive stuff breaks down and is out of warranty.

So, option #2 is a bad choice to take.

Option #3: Turn in the keys and walk away

Dealerships HATE, HATE and HATE this option.

And I find when dealerships hate something, it is good for us.

Since I sell a lot of DIY leasing kits, I get to see a ton of lease agreements, lease worksheets and end-of-lease situations…

And from everything I have seen, turning in our keys and walking away from a lease is almost always the best option to take.

Even if we have some damage.

Even if we are a little bit over the mileage allotment.

It is WAY cheaper to walk away from a lease and pay a few hundred dollars in damages and over-the-mileage penalties.

Whenever my cars come off lease, here is exactly what I do:

First, I use my DIY leasing system and get the best price on a new car – always $0 cash down.

Next, I plan ahead on turning my existing lease in…

Schedule 2 end-of-lease inspections

If available, I schedule my first end-of-lease inspection about 40 days before my lease ends. (I mark this in my calendar so I do not forget.)

And I arrange to have the inspection at my home (or office). We get this convenience at no extra charge because of the disposition fee we paid when we first leased our car.

I always hang out with these inspectors during the inspection. This keeps ’em honest.

On the flip side, having an end-of-lease inspection done at the dealership is a license to steal. They will have a field day and report all sorts of damage we may (or may not) have. By the way: end-of-lease inspections are outsourced and not performed by the dealership.

By starting the process earlier than recommended, we are sure to get our initial inspection report well before our lease ends.

Why is this important?

Because, we get the option to fix repairs cheaper with our own sources than what the leasing company is going to charge us. This is especially true with dents, tire replacement, cracked windshields and curb rash.

Here is what an actual lease return checklist looks like:

lease return checklist

Wear and tear surprises

Many people are under the wrong impression that a lease car must keep its new appearance at lease end.

This is not true.

Our lease agreement allows us “normal wear and tear.”

Most leases allow us:

– Exterior body panel dings, dents and scratches – fewer than 3 “dings” per panel (a ding is the size of a quarter or smaller, without broken paint)…

– Chips, scratches, dents, and gouges smaller than 2 inches on bumpers or panels…

– Single windshield chip without spidering…

– Scratches and gouges up to 6 inches on wheels…

– Scratches and scuffs on lenses (headlights, taillights and markers)…

– Interior burn holes – up to 2 per panel with a diameter up to 1/8 inch…

– Interior permanent stains – 1 per panel up to 1/2 inch…

– Interior cuts and tears – up to 2 per panel up to 1/2 inch…

– Minor staining and carpet wear…

– All four tires and the spare have more than 1/8 of an inch of tread at the shallowest point. (Heck, some leasing companies allow us to turn in our car with bald tires – as long as metal treads do not show through).

If we have chargeable damages and/or over the mileage fees, we will get billed for it via a Turn-In Settlement Invoice. And we usually get at least 30 days to satisfy this bill.

It might not be as bad as we fear

Some are pleasantly surprised and have very little in the way of reportable damages.

Others get worse news than expected.

It all depends on the leasing companies guidelines and the mood of their inspector. Either way, getting a first inspection report well ahead of the last lease day helps us lower the damage amount.

Getting the damage report early allows us to hedge the cost of damages…


Often, we can have our own local car pros lower the cost of repairing damages:

Paintless Dent Removal (PDR) services often “pop out” dents in minutes. And this service costs about a third of what an expensive collision shop would charge.

“Curb rash” (when we scrape our tire’s rims against a curb) can be reconditioned for about $125 each – usually 50% less than the quoted price.

Detail shops can work minor miracles on scratches. I once saw a long scratch on a Mercedes-Benz repaired like new for $250.

Windshield chips are usually covered FREE by our auto insurance policy – with zero deductible. If a windshield has a spider crack, it needs to be replaced. It probably makes sense to pay the $100 insurance deductible and get it fixed on our own.

If tires are bald, we can get ’em replaced with a set of cheap new tires. However, they must be all the same tires – not mismatched.

If there are small nicks and paint chips on our vehicle, I buy a small bottle of exact matching touch-up paint from the dealership’s parts department. I throw out the brush that comes in the touch-up pain bottle and use this thin-bristle brush instead.

Where do we find these local services?

I ask my dealership service contact for recommendations. They gladly pass along contact information as a service for their customers.

And I always keep receipts so I can document my repairs.

Once the repairs are complete, we ask the leasing company to schedule a second, final inspection. The inspector will check our vehicle over again and verify that the repairs were done properly.

Lease extensions

According to Toyota Financial Services, 1 out of every 10 of their lease customers extends their lease up to an extra 5 to 6 months.

This allows us to keep the current rate on our lease and give us extra time to consider our lease-end options.

If we have never missed a payment, odds are good we will be approved for an extension. Even better, there is (usually) no extra cost to get one.

Do not forget these when turning in a leased vehicle

Make sure to bring with you:

– A copy of your lease agreement…

– All keys, keyless entry fobs and any other additions associated with your leased vehicle…

– All vehicle documents received at the time of delivery including the owner’s and maintenance manuals…

Remove any garage door remotes and toll tags.


I often get the same questions about end-of-lease options. Here are my answers:

“Do I have to return my car to the original dealer I got the car from?”
The vehicle can be returned to any dealer of the same brand.

“If I lease a vehicle and have equity at end of lease, can I turn in the car and get a check from the dealer for the equity?”
Maybe – scratch that. Not anymore. Flipping an end-of-lease car died late in the year 2017. I explain why here.

“If I go over my mileage (say by 2 or 3,000 miles) or I have a few extra scratches or dings in the car… can I better leverage the dealer to not charge me for these items in the event I buy or lease another vehicle from them?”
Absolutely. A desperate or aggressive car dealer might “eat” lease damage or over-the-mileage penalties to get another sale…

I recommend the following tutorials in this situation:

Are lease pull ahead programs worth it?
Is turning in a leased car early for another lease worth it?

“I understand Ford leases are different with end-of-lease requirements. Is this true?”
Yes, it is true…

Ford (a.k.a. FMC Credit) requires we let them know 90 days in advance of the vehicle’s lease end if we plan to buy the vehicle, or trade it in. It takes a little advance planning with a Ford lease.

“I have about 90 days left on the lease of my 2012 Lexus IS 250. I am about 6k miles under. I leased in California, but now live in Texas. Do you know if there is any penalty for the out of state return.”
There is no penalty for turning it in out of state. We can return our end-of-lease vehicle to any dealership of the same brand.

“My car was also in a wreck, it was repaired by an approved Lexus body shop. Will this count against me?”
I have good news for you: there is no penalty for the wreck.

“One thing the Hyundai salesman mentioned is that if we decide to trade-in the lease (at the end of the lease) for another lease we would NOT owe any mile overages. Is that true? He said that it’s common in leases. He was adamant about it as we were making sure that we would not owe the 0.20 per mile if we went over 10,000 after the 3 years – which we will.”
Technically what he says is true, if you trade, there is no mileage penalty.


I would NEVER trade in a lease until you read this first.

“I had damage to my leased car. I did go through my insurance and received a check that I have been sitting on, for when I turn in the car. My question is should I have the hail dent fixed and other imperfections? or wait to talk to the dealer at trade in.”
I would get a lease-end inspection and see what the damages are. The damage might not be noticed (or considered chargeable).


If the end-of-lease hail damage amount is more than your insurance check, you might get a quote from a Paintless Dent Removal company – it will probably be cheaper (and you get to keep the difference).

“I have been affected by an emergency and suffered a hardship. What are my options?”
Most leasing companies will allow qualified customers to delay one or two monthly payments, resuming their regular payment schedules when their situations improve.

(A “qualified” customer is typically one that makes regular, on-time payments.)

“Do I have to do anything with my license plates after I turn in my vehicle?”
If you live in the state of Connecticut, Maine, North Carolina, Rhode Island or Virginia, you are required to provide proof of cancellation or transfer to stop the assessment of property taxes on the vehicle. Florida and Kentucky residents are also required to return or cancel their plates.

I would remove the license plate once I dropped off my vehicle at the dealership. I can then use that license plate on my next vehicle (and not have to pay a new plate fee).

“I grossly overestimated the mileage that I believed I could use in three years. Can I get a credit of some sort?”
Unfortunately, no…


You could try to flip your leased vehicle and make a nifty profit – especially if you sell it privately.

End-of-lease contact information

Alfa Romeo
Land Rover

Here is what to do next…

Almost every car dealership wants us to think that we cannot sell back our vehicle for an instant profit. This is a whopper of a lie… a lie that helps to make dealership owners rich. I regularly see dealerships make an extra $3,500 to $6,000 every time they buy out our lease and resell our car on their used-car lot.

Each lease agreement tells us EXACTLY how much we can buy the car for – it is listed as the “Residual Value”.

Instead of trading in our end-of-lease vehicle for a new car lease, we should sell back our car instead. (And we should lease another car as a separate transaction. This gets us more car for less money – and always $0 cash down.)

We can sell back our car to anyone – from dealerships to people off the street. Our lease agreement gives us this option (it is buried in small print). This is 100% legal and 100% ethical. And it is awesome, because most of the time, the lease buyout amount is often thousands less than the on-going market value. And we get to pocket this easy money (and eliminate the lease’s $350+ “Disposition Fee”) at the same time.

It gets better…

If we have dents, scratches, rips – even too many miles… buying out our end-of-lease vehicle and flipping it rips up our lease contract. We will not owe any damage (or over-the-mileage fees).

Now, here is the coolest part:

Normally, we would have to come up with tens of thousands of dollars to buy out the lease, then resell the car to the public (or to car dealerships).

In fact, if we lease a Ford or Chrysler (or have our lease financed by US Bank), we have to come up with the cash to buy out our lease, then try to flip it.

But for every other lease, we can use other people’s money and exploit flipping…

Because lately, there has been a growing number of car-buying services that will bid to buyout our end-of-lease vehicle. These are Wall-Street-funded companies who AGRESSIVELY seek out people like us with slightly-used, end-of-lease vehicles. They know end-of-lease vehicles are great cars to sell as used. And instead of having physical dealerships, they save a lot of money doing everything over the Internet – operating in every state in the lower 48 here in America…

The best part is these profitable, well-financed companies will pay off our lease AND send us a check for the extra lease equity.

How much?

Of course, it depends on the difference between our Residual Value and the bids we get from these well-funded car-buying services. And since we are getting bids (technically “appraisals”), we simply go with the highest offer and keep the difference. Usually, the lease equity we get to keep is hundreds… sometimes thousands of dollars. The highest I have seen was a flip of a Toyota Tacoma – the lease equity was over $20,000.

How do we know if we can profitably flip our car?

We can get an idea if our vehicle will give us lease equity…

We go to any no-haggle, used-car seller (I always check with CarMax and AutoNation) and look for an average selling price of similar vehicles. I find when the average selling price of our end-of-lease vehicle is at least $2,500 more than my vehicle’s Residual Value (again, found on our lease agreement), then I am virtually certain we can flip the car for a profit. Even better, we do not pay that nasty $350+ Disposition Fee).

With access to this list of car-buying services, we pick the highest bid. Then we schedule a pickup of our vehicle (they will bring a flatbed tow truck to our home or office). And we get a check Fedexed to us the next day for the lease equity.

It is SO convenient. (We skip the hassle of returning it to the original dealership and never have to worry about damages or over-the-mileage penalties).

GREAT news: I got the list

I have an always-updated list of these Wall-Street-funded car-buying services. (I update my list every day). And I make my list available for my KTL USA At-Home Car Leasing System clients.

I saved the best part for last:

Getting access to my entire system is virtually free – because when we flip our end-of-lease vehicle, we do not have to pay that $350+ disposition fee. This charge vanishes. And since my entire leasing system is $299, it is like getting my entire system at no charge…

Before you get my system, I recommend reading the most popular posts on my site – click here to get it in seconds