What happens at the end of a lease?

2026-10-13 Vehicles lined up in a depot yard, illustrating what happens at the end of a lease.

At the end of a business contract hire agreement you return the vehicle to the funder, who inspects it. You pay for any excess mileage and damage beyond fair wear and tear. You can then walk away, start a new agreement, or ask about extending. You do not own the vehicle.

The detail

You hand the vehicle back. Contract hire is rental over a fixed term, so the vehicle belongs to the funder throughout. Near the end, the funder or its collection agent will arrange a date to collect it, or ask you to deliver it to a set location.

It is inspected. The vehicle is checked against the funder's return standards, which usually follow the BVRLA fair wear and tear guide. Everyday marks consistent with the vehicle's age and mileage are normally accepted. Damage beyond those limits, missing items or a missing service history may be charged for.

Mileage is compared with your contract. The agreement sets an annual mileage allowance. If you have gone over it, the funder will charge an excess mileage rate stated in your paperwork. If you have used less, check your agreement, because most do not give a refund.

You have choices. Typically you can:

return the vehicle and finish the agreement;
return it and take a new vehicle on a new agreement;
ask the funder whether an extension is available, which depends on the funder and the vehicle;
ask whether the funder would sell the vehicle to you. Many contract hire agreements do not include a purchase option, and a sale is up to the funder.

Timing matters. Start planning three to six months before the end date. Lead times on new vehicles can be long, and an extension or a replacement vehicle may take time to arrange.

Ending early is different. Ending an agreement before the agreed term usually means paying early termination charges set out in your contract. Read those terms before assuming you can end sooner.

A silver car in an inspection bay showing what happens at the end of a lease.

A worked example

Imagine a small business that has leased a van for the full agreed term. Three months before the end date, the owner checks the agreement for the mileage allowance and the return conditions, and notes the van's current mileage.

Before collection, the owner has the van cleaned, gathers the service records, both keys and the handbook, and photographs the bodywork. Small stone chips and light wear to the load area are the kind of thing fair wear and tear usually covers. A dented panel or a torn seat would probably be charged.

On collection day, the driver records the condition and the mileage. The funder then sends an inspection report. If it shows a charge, the owner compares it with the return standards in the agreement and can query anything that looks wrong. Meanwhile, the business has chosen a replacement van and set a start date to follow the old one. The only outcome that is fixed is that the old van goes back. Charges depend on its actual condition and mileage.

A blue hatchback on a stone bridge, a worked example of what happens at the end of a lease.

Questions people ask

Do I own the vehicle at the end of contract hire?

No. The funder owns it throughout, and you return it at the end. Some funders may consider a sale, but this is not part of a standard agreement.

What counts as fair wear and tear?

Fair wear and tear means the normal ageing of a vehicle in regular use. Funders usually follow the BVRLA guide, but your agreement sets out the standard that applies to you.

Can I extend the agreement instead of returning the vehicle?

Sometimes. It depends on the funder and the vehicle, so ask well before the end date. Any extension would be on terms the funder sets.

Is contracthire.tv the funder?

No. Swiss Vans Ltd is a credit broker, not a lender (FCA FRN 668283). The funder named in your agreement handles collection and inspection.

Learn more about car leasing