Do Leasing Companies get vehicles repaired when they are returned?

What happens when a lease car is returned and the best way to do it.

2nd Nov 2022 Wondle

Do Leasing Companies get vehicles repaired when they are returned?


We hear this a lot, “I got charged, and the leasing company doesn’t even get the vehicle repaired; it just sells it at auction and keeps the damage penalties as profit!’


Is it true? Yes….but No.


Indeed, leasing and asset finance companies often do not get vehicles repaired.  The logistics processes that they have refined over years mean the vehicle often gets picked up from the driver's home and driven straight to a de-fleet centre.  At the de-fleet centre, it is examined by a professional vehicle inspector and checked for damage and missing equipment. The vehicle is often then entered directly into an auction and sold.

 'So it’s TRUE! I knew it!’.......not quite. 


The vehicle is still damaged or has equipment missing.  The BVRLA fair wear and tear guide mean that the damage you have been charged for is not deemed acceptable, which means it is likely to be noticed by a potential buyer.  The buyers, in this case, are mostly professional trade buyers.  They look to buy vehicles for Vehicle Supermarkets (Like Cargiant or Motorpoint), big online retailers (Like Cazoo or Cinch), big dealer groups (Like Sytner or Vertu) or the hundreds of smaller independent motor retailers.  These buyers know what retail car buyers will and won’t accept in terms of damages and so they price in the cost of repair or a lower retail price when they bid on a vehicle at auction.


This means the vehicle is bought for a lower price than the leasing company would have received had the vehicle been in a damage free condition.  So whilst it is true that the leasing company may not get the vehicle repaired, that does not mean it represents profit for them.  

Why don’t they just get them repaired?


Well, what it does mean is that they have a slicker remarketing process, passing the time and hassle of repairing a vehicle on to the trade buyers; this efficiency, in actual fact, saves the driver money in the long run.  It is cheaper to do it this way than to incur the cost of delay of selling the vehicle whilst it is repaired, a cost that would just be passed on to the driver.

So, no repairs on leased vehicles?


When premium brands are returned, then there is often a different process which does involve repairing.  This is often because of the bigger impact minor damage has on the value of these types of vehicles (Like BMW or Mercedes).  It is really important to buyers of these vehicles that they are in very good condition and that is reflected in the price they bid.  If a premium marque is ‘retail ready’, then it can be on a forecourt (or the web) in just a few hours, and that means extra potential profit for the retailer if it can be sold almost before it it is bought.  For that opportunity on the right vehicle, buyers will pay a premium price.  This is why Leasing organisations will spend extra time and money to refurbish these types of vehicles.

So I get charged penalties either way?


Either way, the money you may be charged in end-of-contract damage penalties is trying to be reflective of these two situations that the provider may find themselves in. 

 Of course, here at Wondle, we have seen that on many occasions it is possible to get the lease vehicle repaired to a professional standard whilst paying less than the charges you would incur from the Lease Co.  “Why?’ I hear you ask. Well, it's because all vehicles are different.  Different types of paint, different size panels, different designs, different engineering, different impact on resale value, etc., all these differences impact the repair cost. 

BUT,.... a Leasing company can only give ONE price for any given type of damage ( some differentiate between small and large vehicles but most don’t), so they have to pick a reasonable midpoint.  This means the actual repair cost may often be lower than the price on the leasing company’s pricing matrix.  That allows you to pay less for car damage than the penalty price, and that, in a nutshell, is what Wondle does for you.  It gives you the information to work out what your best available outcome is.

We think that is pretty cool; check out how it works here.

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