Understanding Lease-End Fees: Separating Legitimate Costs from Excessive Charges

For many people, leasing a vehicle brings a mix of benefits like lower monthly payments and the opportunity to upgrade every few years. But as the lease term draws to a close, it’s essential to be prepared for the potential costs associated with returning the vehicle or buying it out. Dealerships often add end-of-lease fees, and while some are legitimate, others may be inflated or even unnecessary. Knowing the difference can save you hundreds—or even thousands—of dollars.

Common Lease-End Fees: What’s Legitimate, What’s Not?

When it comes time to turn in a leased vehicle, lessees may encounter fees that can feel overwhelming. Some of these fees are valid, as they cover genuine services, while others can be excessive and may even violate consumer protection laws if they weren’t disclosed upfront. Here are the most common end-of-lease fees you might see:

1. Disposition Fee: This fee is charged to cover the dealership’s cost of cleaning and preparing the vehicle for resale. While disposition fees are typically legitimate, they should be disclosed at the start of the lease. If the fee isn’t mentioned in your lease agreement, it may be contestable.
2. Excess Wear and Tear Charges: Fees for any excessive wear and tear beyond what is considered normal usage. Examples might include damage to the upholstery or deep scratches. These fees are usually legitimate, but you can request a breakdown and compare it to any end-of-lease inspections to ensure accuracy.
3. Mileage Overcharges: Leases come with mileage limits, and going over these limits will often lead to mileage overcharges. Like the disposition fee, mileage overcharges are generally legitimate as long as the rate per extra mile was disclosed in your lease.
4. Pre-Delivery Service Fees: When purchasing your leased car, some dealerships add a “pre-delivery” fee, claiming it’s necessary to prepare the vehicle. If you’ve been the only driver, this fee may be unnecessary and could be worth disputing.
5. Document Processing Fees: These fees cover the paperwork involved in the lease termination or buyout process. While document fees are common, many dealerships mark them up. If you notice unusually high processing fees, consider asking for an itemized explanation.
6. Inspection or Certification Fees: Some dealerships may attempt to charge for inspection or certification when purchasing the vehicle at lease end. If you’ve been the only driver and maintained the car, this could be an excessive or redundant fee.

Understanding these fees and what’s involved can help you navigate the lease return process more confidently, as well as identify charges that may be unnecessary.

How to Avoid Paying Excessive Lease-End Fees

The best way to avoid paying unexpected fees is to carefully review your lease contract. Dealerships are legally required to disclose all fees at the outset of a lease under the Consumer Leasing Act (CLA). If a fee wasn’t included in your initial lease agreement, it could be considered an unlawful charge.

Here are a few tips to help you avoid being overcharged:

1. Understand Lease Terms at the Start: Familiarize yourself with all potential fees before signing a lease. This will give you an idea of what to expect and make it easier to spot unauthorized charges at lease end.
2. Request an Early Inspection: Many dealerships offer early inspections toward the end of a lease, which can give you a preview of any potential wear and tear charges. This allows you time to address minor issues that could lead to fees.
3. Negotiate Fees: If you see unexpected or high charges, don’t hesitate to negotiate. Many dealerships may be willing to lower or waive fees if you’re buying out the vehicle or leasing a new one.
4. Review State and Federal Protections: State and federal protections, such as those under the CLA, prohibit dealerships from charging undisclosed fees. If you encounter fees not mentioned in your lease, it’s worth knowing your rights under consumer protection laws.

When to Seek Legal Help for Unfair Fees

While some fees may be reduced through negotiation, others may violate your rights as a consumer. Unlawful charges—such as fees that weren’t disclosed in your lease agreement—can often be challenged legally. Under the Consumer Leasing Act, you may be entitled to reimbursement if your dealership has violated the terms of your lease by imposing these fees.

If you’ve done your due diligence and believe that the fees are excessive or were not disclosed, seeking legal assistance may be the best option.

How Baron, Herskowitz, and Cohen Can Help

At Baron, Herskowitz, and Cohen, we are dedicated to protecting consumers from unfair and excessive end-of-lease charges. Our team is experienced in navigating consumer protection laws like the Consumer Leasing Act, and we know the tactics that dealerships may use to impose hidden fees.

We provide a free case evaluation to review your lease agreement and end-of-lease fees to determine if any charges are unlawful. If your dealership has imposed unauthorized fees, we can represent you in seeking reimbursement, as well as any damages you may be entitled to.

Don’t let excessive fees turn your lease experience sour—contact us today to discuss your case and reclaim your financial peace of mind.