How to Avoid End of Auto Lease Penalties and Scams

Jeff Ostroff Author Circle
By , Consumer Advocate, Editor-In-Chief
Published February 1, 2012 | Updated March 10, 2019

Auto leasing is stacked against most consumers, who rush in uneducated, and don't consider all the fees and penalties they face, especially at the end of the car lease. We hear from our visitors all the time at the end of their lease, in a panic because they have $3,000 to $5,000 in mileage penalties or $2,000 excessive wear and tear and $1,000 in new tire fees.

But how did these car buyers end up sacked with all these fees, when they thought they are only going to be making 36 simple monthly car lease payments? Let's rewind back in time a bit to step inside for a detailed look at what happens at the end of a car lease and how you can avoid often steep blindsiding penalties and car dealer scams associated with auto leasing.

You can owe thousands in unexpected fees at Lease End

One main problem with leasing is you have inexperienced car buyers who rush into the auto lease with the same ignorance that they exit out with 3 years later. Before you even consider leasing a car, you should educate yourself first with the advice from our consumer advocate guide on How To Lease A New Car and Avoid Dealer Scams.

Pair car shopper inexperience with a few auto leasing scams pulled on you by the car dealer, and you have a recipe for financial disaster for non-savvy buyers who lease. The root cause of all this aggravation is that every single lease contract has verbiage in the fine print on the back side that calls out steep penalties for trying to terminate your lease early which is known as breaking the lease.

Other fees that can blindside consumers stem from failing to perform scheduled maintenance, standard end of lease disposition fees, mismatched tires, and more fees for excessive wear and excessive mileage. It's all right there in very easy to read black and white print, very clearly explaining it, but new car shoppers never read it, and thus they are not prepared to avoid all the detailed end of lease penalties.

This means you can owe thousands of dollars in end of lease fees that you were not expecting to pay. So what are these lease restrictions and how do we avoid them?

Lease Restrictions That Lead to Penalties

We all know about the steep mileage penalties associated with vehicle leasing. The front of your paperwork always shows the excess mileage charge of $.15 to $.20 per mile if you exceed 10,000 miles on some cars, and 12,000 miles for others. Many people lose track of this while driving their car all over the place, racking up mileage.

If you cannot drive under 1,000 miles per month, then you are not a good candidate for auto leasing, and you should also be prepared for huge mileage penalties at the end. Most people drive about 5,000 to 10,000 over their lease contract mileage limit and find themselves facing $1,000 to $2,000 in penalties at the end of the lease.

Our consumer advocate team analyzes a lot of leases sent to us from our visitors, and all contracts list very similar restrictions near the end of the fine print on the back side of the contract. You'll typically see items mentioned such as maintenance, repairs, operating expenses, damage and excessive wear buried in the fine print.

Since virtually no one ever reads the fine print on a new car lease when they sign the paperwork, they all find themselves blindsided by excessive end of lease fees when they return the car at the end. We are her eto help make sure this does not happen to you.

All 4 Tires Must Match when you return your leased car

One very costly penalty that sneaks up on many car shoppers who leased is the issue of mis-matching tires. At the end of your lease, the contract states that your vehicle must have 4 matching tires with more than 1/8" tread left on them. Do not buy any recapped tires and don't just replace one tire with a non-matching super cheap tire. If you do this, they will charge you more than retail price for 4 brand new tires just because you wanted to save a few bucks on one tire.

The mis-matched tires issue is another $1000 fee that you could have avoided. You are required to follow the manufacturer's maintenance plan and change fluids when they should be changed. If you fail to maintain the required maintenance schedule on your car, they can bill you for that too.

If your oil and transmission fluid is not brown and purple respectively, then change the fluids right away. Otherwise you'll be black and blue later. During inspections they take a plastic credit card type device and run it up and down the paint nit picking for scratches and dimples and dents.

The battery must be good, the odometer must be working, in short, the car should be roughly in the same condition in which they leased it to you, with only minor acceptable wear and tear. Does your leased vehicle have any stains on the seats or carpets? Clean it off. If you have Stanley Steamer coming to your house, have them do your vehicle mats as well.

Car Dealer Scams That Cost You Thousands at Lease End

Too many people let down their guard and just drop of their car at lease end thinking they are done. The car dealer lies to them and says, "don't worry we don't need to do an inspection, you are good to go." Then a month later you get a letter from the leasing company billing you for $2,000 in excessive wear and damage to the car. Here's a typical email from one of our visitors, returning his leased Lexus IS:

"At the dealership I requested the car to be inspected before I leave... Lexus dealer told me they don't do inspections anymore and they went for the Lexus Financial Company to send people for that. I expressed my concerns that I should be present. Again, I was gently dismissed as "don't worry about it." I found myself obliged to leave the car (end of lease date) to avoid fees and on my way outside I took few shots of my parked car and the odometer (poor quality cam). Now I receive a letter from Lexus stating that I have damages worth $1,000 to pay."

How to Avoid End of Lease Penalties

Don't wait until the last day of your lease to determine if there is a potential to be charged fees. Now that we stepped into the vortex and we know what causes all these penalties and unexpected costs, let's look at how we can avoid them. First, a lease is a contract signed by both you the customer and the leasing company. You as the customer have the right to have the vehicle inspected when you bring it back at the end.

A few weeks before the end of the lease, call the leasing company and demand an inspection appointment, and make sure you show up. When you bring the car in, do not bring it back at night or in the rain. Return the car on a clear day so you can see any and all potential defects. Avoid lunch time as your point person is likely to be out at lunch, unless they specifically give you that time slot.

Ensure the person you have the appointment with is in. Confirm he appointment the day before, and again the day of the appointment to ensure they will be there to inspect.

If the leasing company tells you to take your leased car to a dealer for inspection, call the dealer and verify they will indeed do the inspection, and insist on an appointment time and person. When you get there, take lots of high-quality photos of your car at the dealership, to refute any bogus damage or wear claims they come up with later, and trust us, they will come up with damage.

Shoot multiple well-lit photos of the interior of your car and the odometer. Take photos using every angle. Get shots of a penny in the tire tread to prove how much tread is left. Photograph all 4 tires to show they are the same make and model.

Then shoot video of the car inside and out with a high definition camera. Get close-up photos and video of any damage areas in case they make any damages seem bigger or more expensive than it is.

It stinks that you need to be both a lawyer and a NASA engineer just to return your leased car or truck at the end of your lease contract period, but they are sticklers about piling on damage penalties. You need to be a stickler about making sure they don't overcharge you. Complete all your photography while you are still at the dealership to prove the vehicle was in good shape when you returned it to them.

Obtain Documentation Clearing You of Any Penalties

The car dealer does not want to give you a paper exonerating you of any damage or excess wear, so you may have to extract it out of them. You need to obtain a document from them clearing you of any mileage and excessive wear penalties. If they refuse, then report them to the Better Business Bureau and your State Attorney General web site consumer complaint form for violating your customer rights and perpetuating a scam to keep you out of the loop.

The bottom line for you is to walk away that day with something in writing exonerating you of any more responsibility to the car. It's your right, you are the paying customer, so demand what is yours, and don't leave without it. Now they can't send you a letter a month later demanding $2000 for damages.

What if your mileage penalty is in the thousands? You might consider just buying the car from them at the Residual Value, maybe even try to haggle the purchase price even lower. If you buy the car, you no longer owe them any end of lease fees other than their standard bogus purchase option fee.

A simple bit of cautious planning and educating yourself ahead of time will save you a world of grief at the end of your car lease.

Author Jeff Ostroff

About The Author: Jeff Ostroff

A lifelong consumer advocate with over 20 years of unparalleled expertise, Jeff is the Founder, CEO and Editor-In-Chief of As chief consumer advocate, he oversees a team of experts who cover all aspects of buying and selling new and used cars including leasing and financing.

For decades, Jeff has been the recognized authority on vehicle purchasing, sought out often by the media for his decades of experience and commentary, for live call-in business radio talk shows and is cited often by the press for his expertise in savvy car shopping methods and preventing consumer scams and online fraud. Jeff has been quoted in: CNN, MSNBC, Forbes, New York Times, Consumer Reports, Wall Street Journal and many more.

Jeff also has extensive experience and expertise in new car brokering and selling used cars for clients on eBay and Craigslist. Connect with Jeff via Email or on Twitter. has affiliate relationships with multiple web sites. We are paid referral fees for leads or sales generated from visitors that click on some links or fill out certain forms on this site. Please view our advertising policy page for more information.