End-of-lease Damage: What Dealers Need to Know

Car leasing has quickly become one of the most popular choices for customers looking to get behind the wheel of a new car. It offers flexible contract lengths, manageable monthly costs and the opportunity to drive newer vehicles. It is also increasingly chosen over traditional ownership. 

But with leasing volumes increasing, so is the number of vehicles being returned at the end of the term with damage that goes beyond fair wear and tear. For customers, this can mean unexpected penalties but gives dealers a chance to help customers with protection products. 

The Growth of Leasing and End-of-Term Checks 

According to the BVRLA, the UK leased vehicle fleet has grown rapidly in recent years, with nearly 2 million vehicles on the road under lease contracts, including both business and personal agreements. 

At the end of the lease, every vehicle is inspected, where cars are checked against the established BVRLA Fair Wear & Tear Guide to see whether any damage goes past what’s considered standard for everyday usage. Anything outside these parameters, such as dents, chips, scuffs and damaged wheels could trigger additional charges, with customers left with surprising penalties. 

Why Lease Returns Can Come with Extra Costs 

Industry research shows that around 45% of leased vehicles are returned with damage beyond the accepted fair wear and tear standard, meaning almost half of lessees are liable for additional cost when the lease finishes. 

If a customer owns a car privately, scuffs and knocks may go unnoticed for a period, or it is down to the customer to decide if or when to get them repaired. However, when the vehicle is leased, this damage is always noticed by the dealership, and the resolution is out of the customer’s hands. 

When damage charges are applied, the average cost per vehicle returned outside fair wear and tear standards was approximately £368.00 in 2025.  

Turning Risk into Opportunity 

Protection products such as alloy wheel insurance and minor damage cover can make a real difference to the customer experience. These products are designed to help the cost of repairs that may occur from everyday use and make sure customers aren’t hit with a bill at the end of the lease. For dealers, offering these products adds value to every lease, helping the customers feel their investment is protected. It also gives them peace of mind, making the leasing experience a more positive one overall. 

The practical takeaways for dealers are: 

Set expectations: Explain fair wear and tear standards at the point of handover to make sure of no surprises later. 

Explain potential costs: Make customers aware that though the damage will seem “minor”, it can lead to costs they might not expect. 

Solutions, not problems: Speak about VAP’s as a simple solution, to help customers protect their budget. 

Use real examples: Share examples of past return repair charges to highlight the value of the products. 

Helping Customers and Dealers Thrive 

As the UK leasing market looks to continue trending upwards in 2026, there are both opportunities and risks. By understanding how lease return inspections work, setting clear customer expectations and offering protection products that help minimise wear costs, dealers can help customers avoid unwelcome charges and build stronger long-term loyalty.