You probably know that the leasing company will charge you for any damage to a vehicle that it considers to be more than normal wear and tear. But you may wonder what "normal" is and what falls into the "you're going to have to pay" category.

Basically, leasing companies impose additional charges for any damage to the vehicle that's going to cost more than an average amount of money to refurbish. The reason is simple: Automakers want to maximize the vehicle's value for the next sale, and that means spending as little as possible for reconditioning.

Because of the anxiety around turning in a leased vehicle, carmakers have developed programs to let people know the lease is winding up and make them ready for turning in their vehicle.

The Lease Inspection

Although there is some variation in the process, the lease return process typically starts about 90 days before the end of the vehicle contract. The leasing company (technically called the "lessor") will contact you to let you know your lease contract is coming to an end. It will then contact you to set up an appointment for an inspection. Any damage that's going to cost more than an average amount of money to refurbish is called excessive wear and tear.

Many manufacturers use an independent company to conduct the vehicle inspection, which is free for the lease holder (technically called the "lessee"). The inspector will come to your home or office, and the process takes about 45 minutes. A pro tip: Be nice to the inspector. Is it hot out? Offer some water. Is the inspector doing the job at your workplace? Pick up the cost of parking. Your courtesy could come in handy if the inspector has leeway in deciding whether a bit of damage could pass.

Most manufacturers look for damage in these general categories:

  • Dents, dings, scratches and scrapes on the exterior, bumpers and wheels, especially "curbed" wheels
  • Cracks, stars or excessive pitting in the windshield and other windows
  • Abnormal or excessive wear to the tires
  • Tears or stains on the upholstery that can't be repaired or cleaned with normal refurbishing

Inspectors typically measure the size and depth of dents and scratches and enter this information, and other problems, into a computerized template that estimates the cost of repair. At the end of the inspection, or shortly thereafter, you will receive a condition report that lists any damage above the normal wear and tear and what it costs to fix the problem.

Prepare for the Inspection

Most manufacturers' websites provide specific information about the end-of-lease process and a detailed definition of wear and tear, which also is called "wear and use." Toyota Financial Services created a lease turn-in site so people can better understand what will happen and see what kinds of damage will incur a charge.

For example, inspectors for Toyota look for any dents or scratches that are bigger than an area that can be covered by a credit card. They don't charge customers for wheel gouges smaller than an inch or normal tire wear.

Before the inspection, experts recommend removing all personal items and washing the vehicle. You don't have to spend hundreds of dollars, but a detailing job might also be a good idea. It's definitely to your advantage to present your car in the best light you can.

This also might be the time for some touch-ups.

Are there light scratches? Some cut only through the outer layer of paint, called the clear coat. These scratches can sometimes be eliminated by a thorough detailing. If a scratch is deeper, and you are pretty sure the manufacturer will charge you for it, you can buy a small bottle of touch-up paint from the manufacturer's parts department. The experts suggest using a thin-bristle brush from an art store, not the thicker brush that comes in the touch-up paint bottle.

There also are a number of independent paint-product companies, such as Dr. ColorChip and Langka, whose products can match original manufacturer colors. If you carefully follow the directions, you can get good results.

If your automobile has multiple small dents that haven't broken the paint, you can call a paintless dent remover. Sean McMullan of dent-remover Crayford Coachworks in Los Angeles says he does a lot of pre-lease return business. Owners who are about to wrap up a lease come to him to remove all manner of dents and dings. He estimates that his fees are about a third of what a body shop would charge for the same repair.

A Second Chance

As you can see, having the inspection performed well before the end of the lease gives you a chance to possibly save some money. However, if you have an initial inspection and the manufacturer's charge for the repairs seems reasonable, consider just paying the money and saving your time.

If you decide to do some fixing up, most leasing companies will allow you to schedule a second inspection. The inspector will check the vehicle over again and verify that the repairs were done properly.

Give Back What You Got

The experts say that inspectors will also remind customers to locate all the things that came with the car and bring them to the lease turn-in. For example, many people forget to bring the second set of keys they received when they leased the vehicle. Other pieces include tonneau (cargo) covers, the original floor mats, spare tires, and even third-row seats that were perhaps removed and stored in the owner's garage.

Other Lease-End Tips

Contest excessive use charges: If the excessive-use findings on a lease-return condition report seem out of whack, you have the right to contest them with a representative from the leasing company. While you might not get all the penalty fees removed, it's likely you could knock them down and avoid a big payment. This is a particularly effective approach if you are going to lease your next new vehicle from the same maker. The manufacturer might waive the cost of some or all repairs and fees if you remain loyal to the brand. You might also get a break if you have gone over mileage limits for the car if you sign up for a new lease with the same maker.

Get a lease extension: If you run out of time to take care of repairs or you haven't yet found a replacement vehicle, you can request a lease extension. And if you're wondering whether you should purchase your leased vehicle or whether it has equity that you can use, read "3 Ways to Turn Your Lease Into Cash."

Do the math on whether to buy the car: If the odometer indicates that you have gone way over your mileage limits or if you have truly excessive wear and tear, you may have reason to think about buying your leased vehicle. When you do what's called a lease buyout, you will not be penalized for going over your allotted mileage or having a dent in your fender. Factor in those penalties when you're deciding if buying your leased vehicle is the right move, but also take into consideration other factors, such as the vehicle's residual value. Our lease buyout article has all the information you need.

By planning ahead and knowing what the inspectors will be looking at, you can reduce turn-in expenses — or at least be ready to deal with them when the time comes.