Are There Any Hidden Fees When Leasing a Car​?

Leasing a car is a contract agreement, and like all contracts, many clauses burrow themselves within the pages like little, lawful termites. With clauses come a select few hidden fees that you may be liable to pay in exceptional circumstances. Some fees are built into the contract and fee, so you’ll never have to consider them, while others will pop up when things go awry. Something you should be mindful of, as it could impact how you use your lease car.

In this blog, we look at the hidden fees that can crop up when leasing a car. This will apply to both personal (PCH) and business (BCH) leases – the only notable difference between the two is how VAT operates with the fees. PCH quotes are inclusive of VAT, while BCH quotes will exclude it, since businesses can reclaim some of it back.

Administration Fee

Administrative fees rule the world, and in leasing, this is a one-time fee incurred for arranging the lease contract and vehicle. Depending on the leasing company, this fee can range from roughly £50 to £350.

Another detail to note: if you receive a fine or penalty while on the road, it will initially go to the leaser, but they will always transfer the penalty onto you. In this case, they will almost always add an additional administrative fee on top of this.

Road Tax Contributions

Road tax, known officially as Vehicle Excise Duty, is a government requirement on all registered vehicles in the UK, and typically included for the entire duration of a lease contract, incorporated into your monthly fee.

One key phrase to look out for is “road tax included”, which means the road tax is covered by the leasing company, and none of your concern. If this phrase is nowhere to be found, there may be an agreement in the contract where the leaser can pass any change in road tax onto you, causing a slight bump in your charges midway through the lease.

Late Payment Fees

As the name implies, this is for payments that arrive late, or if your direct debit has bounced. The charge will be calculated either through an agreed late payment charge or via a percentage interest. It is vitally important that you pay all your monthly payments on time.

Contract Amendments

Should you wish to change the terms of your lease contract partway through, you may have to pay an additional administrative fee for the change. Read our guide to changing your car lease contract here for more information.

Early Termination Fee

Similar to the previous hidden fee, early termination of the contract results in a fee based on negative equity. This means that if the car’s value is significantly less than the remaining finance balance, you will be liable for the difference. A lease price is calculated based on a prediction of the car’s value in a few years’ time when the lease ends, and your lease covers the difference, so negative equity covers the shortfall of passing the car back early.

Excess Mileage Charges

Every lease contract has an agreed-upon annual mileage limit to ensure that the car depreciates as expected. Should you exceed that limit, you will pay an additional fee for every mile that you go over the limit. Perhaps not a hidden fee in the traditional sense, but many drivers forget in their day-to-day lives that they have set a maximum amount of driving on themselves, which could lead to a surprise at the end.

At cars2buy, you don’t have to search through hundreds of low-mileage lease deals. With our transparent service and powerful search functionality, you can set a minimum mileage range so you can find a deal that matches how much you’ll actually be driving the car, much quicker. Browse our lease deals today, and you may find your next car sooner than you think.

Wear & Tear Charges

Take care of your vehicle, or face the financial consequences. When you return your vehicle, an inspection will take place against the Fair Wear and Tear guidelines of the British Vehicle Rental and Leasing Association (BVRLA). Any dents, scratches, cracks, scruffs, broken parts, missing parts or excess dirtiness will lie at your feet, and you shall have to pay for the repairs. Our top tip? Give the lease car a wash inside and out before returning it to let them know you’ve taken good care.

For a full breakdown of what constitutes fair wear and tear, consult our guide to lease wear and tear charges here.

Optional Fees

There are numerous optional fees that could crop up should you add any extras to the lease agreement, such as maintenance packages or GAP insurance. To find out about both, check out our guides to maintenance packages and GAP insurance here.

Choose the Right Lease Deal with cars2buy

While leasers may hide fees in their contracts, at cars2buy, we don’t charge a penny in commission to use our transparent car lease comparison service. We are the UK’s number-one destination for finding new car leases, allowing you to browse the very best personal and business car leases from hundreds of trusted dealerships across the UK. We’ve done the hard work for you, so you can compare all the latest leases all in one place. Get your hands on the perfect new lease car for you without the hassle with cars2buy today.