What Happens If You Damage a Leased Car?

If you’re wondering what happens if you return your leased car with some damage, then your lease agreement is your go-to guide. Every lease expects you to return the car in pretty much the same shape as you got it. But some are okay with light scratches or general wear and tear. That’s why the agreement will tell you what damages are okay and what might land you in trouble. 

Don’t panic if you do have some damage on your car. Talk to your insurance company first – they may cover some damages. When you're getting repairs, remember to stick with original car parts. Using non-OEM (Original Equipment Manufactured) parts could stir up trouble when returning your car.

Think about a thorough inspection before you return the car. This way, you'll know beforehand about any potential repair costs the dealership might charge you. 

Leasing a car comes with certain rules – you've got a yearly mileage cap, you need to keep the car in good shape, and you need to return it without any significant wear and tear. If you fail on any of these points, this can cost you a hefty sum of money when you bring your car back to the dealership. 

Most lease agreements include a fair wear and tear policy. Keep in mind that every dealership has their own guidelines. The contract outlines the specific items that are either covered under acceptable wear and tear, or for which you'll be held financially accountable.

Items the dealership will most likely take a closer look at are:

• Excess mileage
• Dents/collision damage
• Scrapes/scratches longer than three inches 
• Wheel scratches longer than two inches 
• Windshield chips or cracks that are larger than a quarter 
• Tire wear that is deeper than 1/16th of an inch tread 
• Poor-quality repairs or repairs that do not meet the dealerships standards
• Cuts, tears, burns, or permanent stains in the fabric or carpet
• Broken/missing parts
• Mechanical and transmissions (clutch, brakes, drivetrain, or suspension)

Excess mileage

Typically, leases include a yearly mileage allowance of 12,000 miles. If you exceed this agreed-upon mileage limit by the end of your lease term, be prepared to pay a fee for each additional mile. You can find the exact amount of this fee in your lease agreement. It usually falls between $0.15 and $0.30 per mile, depending on the specific vehicle you leased. The purpose of this fee is to compensate for the depreciation in the vehicle's residual value caused by the extra miles driven.

Scratches, scrapes, and dents

Dealerships often allow up to $500-$1,000 in wear and tear before they charge you. This can cover regular wear and tear and preparing the car for a resale. But bigger dents and scratches that need paintwork can cost you over $1,000. 

Before returning your leased car, get a repair estimate from a detail or body shop. Specialists can fix dents without breaking the bank, especially if the paint isn't damaged. Deep scratches can be fixed with touch-up paints that match the original car color. How-to videos can guide even beginners to a professional finish. 

Fixing wheels and glass

Brace yourself for costly repairs if your windshield has large cracks, especially if your car has advanced features like rain-sensing wipers or auto high-beam headlight dimming. If you only have a chip or a small crack, you can use windshield repair kits to fill them or go to a shop and let a professional handle it. Because poor-quality repairs or repairs that do not meet the dealership's standards can also cost you more at the end. 

If you've scraped your wheels, and you think that the damage exceeds the allowed limit of your lease, there are repair services available that can help you save money in the long run. To make it even more convenient, some mobile services will come to your location and fix the wheels right in your driveway.

Worn out tires

In most cases, the tires that come with a leased car will last throughout a 2- or 3-year lease period. If you've leased a certified pre-owned vehicle, the tires may have worn more than the acceptable limit. Here's why you usually won't need new tires:

• Dealerships often offer better prices for tire replacements compared to tire stores.
• Dealerships may not accept tires purchased elsewhere.

If your tires are worn and need replacing, take your vehicle to the dealership and ask for a price quote on new tires. Make sure to inquire about the specific make and size of tires they recommend, dismounting and recycling the old tires, as well as mounting and balancing the new ones. 

Here are some unacceptable wear and tear damages that can result in charges if they were not pre-existing. Check your car lease agreement for more detailed information.

Scratches

Any scratch that is longer than three inches or greater than ¼ of an inch in thickness, in which the paint has been removed and the underlying panel is exposed. 

Dents/dings damage

• Dents that are larger than the size of a credit card.
• Four or more dings per panel (any size).
• More than four damaged panels.

Paint damage

Any paint damage that exposes the underlying panel or causes excessive clear coat etching, as well as any customer-applied touch-up paint.

Windshield, windows, lights, and mirrors

• Any windshield and window damage that would require replacement or repairs. 
• Glass that is damaged, shattered, or tinted in a non-factory manner. 
• Lights, turn signals, mirrors, or lamps that are bent, broken, or missing.

Body and Bumpers

Any damage to the frame, structure, or bumpers of the vehicle that has not been repaired. 

Interior and seating

Any burns, holes, stains, or tears in the interior, including seat cushions and upholstery, as well as missing or severely damaged carpets and floor mats, can be considered excessive damage.

Wheels

• If the customer installed tires or wheels on its own
• Missing or greatly damaged wheel covers
• Wheel gouges greater than one inch

Amenities and features

• Missing keys and remotes can be considered excessive damage.
• Missing parts or accessories such as shifter knobs, head rests, cargo covers etc.).
• Broken or malfunctioning equipment due to neglect.

Additional items that can be considered excessive damage

• Lack of routine maintenance leading to damage (engine, oil, tires etc.).
• Spills (Water stains, drinks etc.).
• Bad odor (smoking, rotten food, pets, etc.).
• Inoperable components due to unauthorized modifications.

When it comes to a leased car, it's important to remember that it's not technically yours, and you're responsible for returning it in the same condition as when you received it. If you indeed damaged it, then there are a few options for you to look into.

1. Pay the price

When leasing a vehicle, the lessor may charge for “excessive” wear and tear. Small scratches might be considered normal, but significant damage means paying out of pocket upon return. You can either pay the leasing company for the damage or check if you have a damage protection plan. If not covered, compare the cost of returning the car with the damage versus fixing it yourself before the lease ends.

2. Inform your auto insurance 

If your leased car gets damaged, weigh the repair costs against your insurance deductible. If the former is higher, consider filing an insurance claim. Don't fret about the potential dip in resale value due to accident history; it only matters if you plan to buy the car post-lease. However, be prepared for possible premium hikes if the accident was your fault. Your full coverage policy likely covers many damages.

3. Merge the costs with your next lease 

If you're considering leasing again and the damage exceeds your out-of-pocket budget, you might have the option to include that cost in your next lease. It's important to note that any rebates or discounts you receive for leasing again could be offset by this additional expense, and you may end up with a higher monthly payment. 

4. Buy out the lease

Another option is to purchase the car at the end of the lease. Leasing companies typically charge extra for damages that occur during the lease, since they plan to sell it as a pre-owned car. By buying the vehicle yourself, the leasing company is relieved of the responsibility to repair it for resale.