Requirements · Leasing and finance
What to know when a lease or PCP agreement comes to an end
Last updated 25 October 2026 · 3 sources listed · Reading time about 4 minutes
Short answer
As an agreement ends you usually choose among handing the car back, keeping it by paying a final amount, or trading it in for another agreement. Handing back requires meeting mileage and condition standards that are assessed by an inspector. Prepare early by reading the contract, checking the car against the wear guide, arranging any repairs yourself if cheaper, and documenting the handover with photographs.
Who this is for: A customer approaching the end of a lease or personal contract purchase who needs to understand the choices, the inspection process and the costs that can arise.
What to evaluate
Contract end options
The choices differ by structure, and some require notification periods.
How to check: Read the end-of-agreement section and note any deadlines for telling the provider your choice.
Mileage position
Excess distance is charged per unit, and the rate is fixed in the contract.
How to check: Compare the odometer with the allowance pro rata, and ask whether the allowance can be adjusted before the end.
Condition standard
Providers apply a wear and tear guide, and damage beyond it is charged.
How to check: Obtain the guide, inspect the car against it and photograph panels, wheels, interior and glass.
Service and documentation
Agreements may require a service history, both keys and manuals to be returned.
How to check: Gather all keys, books, accessories and records and confirm requirements with the provider.
Final settlement figure
If you keep the car, you must pay or refinance the deferred amount, which affects budgeting.
How to check: Ask for a written settlement figure and compare it with the car's market value from an independent guide.
Comparison
| Route | What you do | Watch out for |
|---|---|---|
| Hand the car back | Arrange collection or return and attend the inspection | Charges for excess mileage and damage beyond fair wear |
| Pay the final amount and keep the car | Settle the deferred sum from savings or refinance it | The car may be worth less than the final amount, and refinancing adds interest |
| Trade in toward another agreement | Use any equity as a deposit on a new agreement | Being drawn into a repeating cycle without comparing the market |
| Sell the car privately and settle the finance | Repay the lender from the sale proceeds | Needs lender consent in some structures and care over ownership transfer |
Decision worksheet
Rate up to three options against this guide’s own criteria. It runs in your browser and saves only on this device. It is a thinking aid, not a recommendation.
1. Have you checked each criterion?
0 of 5 criteria checked.
2. Compare options (0 = fails or unknown, 3 = meets it well)
| Criterion | |||
|---|---|---|---|
| Contract end options | |||
| Mileage position | |||
| Condition standard | |||
| Service and documentation | |||
| Final settlement figure | |||
| Total (max 15) | 0 | 0 | 0 |
Questions to ask before you commit
- When must I tell you which option I will choose?
- What standard of wear and tear will be applied, and can I have the guide?
- How will the car be inspected, and by whom?
- What is the rate for excess mileage, and can I adjust my allowance now?
- If I keep the car, what is the exact amount payable and by when?
- Can I repair damage myself before return, and do you accept third-party repairs?
- What happens if I disagree with the inspection findings?
- Is there any fee for arranging collection or for terminating the agreement?
Typical trade-offs
Repairing minor damage before return versus paying the provider's charge
- Upside
- Independent repairs can cost less than the provider's rates.
- Downside
- Poor repairs may be rejected, and you may spend money that was not needed for fair wear.
Keeping the car versus handing it back
- Upside
- You know the car and avoid return assessment.
- Downside
- You take on the risk that its value is below the final amount, and ownership brings maintenance risk.
Rolling into another agreement versus shopping around
- Upside
- Convenience and sometimes loyalty offers.
- Downside
- Loss of leverage, and the risk of perpetual finance without equity.
Early hand-back versus waiting for the end date
- Upside
- May reduce further payments if allowed.
- Downside
- Early termination charges can be substantial.
Common mistakes
- Leaving preparation until the last week. Start months ahead so you have time to repair and compare options.
- Not photographing the car at return. Take dated photographs of every panel, the wheels, the interior and the odometer.
- Assuming every mark will be charged. Check the guide, since fair wear is typically allowed within stated limits.
- Forgetting accessories and keys. Missing items can incur charges, so collect everything listed in the contract.
- Ignoring the option to dispute. If the inspection report seems unfair, use the provider's complaints process and, if needed, the relevant ombudsman.
Related questions
How are damage charges decided?
Providers use a published or industry wear and tear guide that defines acceptable marks and condition. An inspector compares the car with that guide and lists items outside it, which are charged at the provider's rates. Ask for the guide at the start and again before return. Photographs, repair quotes and independent opinions help in a dispute. Many industry bodies publish standards that providers adopt, so check which applies to your agreement.
Can I sell the car before the agreement ends?
Often yes, but you must settle the outstanding balance and obtain the lender's consent, because the lender may own the car until paid. The process normally involves getting a settlement figure, paying it from the proceeds or other funds, and then transferring ownership to the buyer. Leases are usually more restrictive. Check the contract and ask the provider for the procedure to avoid transferring a car that is not yours to sell.
What if the car is worth more than the final amount?
In a PCP this is positive equity. You may be able to use it as a deposit on another car, sell the car and keep the surplus, or pay the final amount and keep the car. Get an independent valuation and compare it with the settlement figure. Some dealers will offer to use equity toward another agreement, so compare that offer with selling elsewhere.
What if the car is worth less than the final amount?
If the amount was guaranteed, you can generally hand the car back and walk away subject to conditions on mileage and condition. If you want to keep it, you must pay the final amount, which may exceed the market value. Some people refinance the shortfall, which adds interest. Understand your obligations under the contract and consider independent advice on the options before committing.
Do I have to take a new agreement with the same dealer?
No. You may hand the car back, buy it or move to another provider. Dealers may present offers to encourage you to stay, but you are free to compare alternatives. Check any equity or settlement terms before accepting and consider whether the offer includes fees or constraints that lessen its value. Take time to review documents away from sales pressure.
Sources and further reading
These pages were reachable when we last checked. They informed definitions and rules referred to above; they do not endorse this guide. Where rules differ by country, check the authority for your location.
- Financial Conduct Authority — UK Financial Conduct Authority, retrieved 27 October 2026
- Auto loans — US Consumer Financial Protection Bureau, retrieved 27 October 2026
- Financial Ombudsman Service — UK Financial Ombudsman Service, retrieved 27 October 2026
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