Your Car Lease Is Ending, What Should You Do Next?

The final instalment does not close the matter. You still need to decide whether the car will remain with the business, go back to the finance provider or make way for a replacement. Each option can work, but not under every agreement and not with every vehicle.

The worst time to decide? One week before the contract ends. That leaves little room to value the car, check the purchase terms, prepare it for return or find its replacement. Start three to six months in advance. Especially if the vehicle is used every day and even a short gap would disrupt customer service.

Start with the contract

Under a Polish operating lease, the end of the agreement will usually give you the right to purchase the car for a price set in advance. This may be a nominal 1% of its original value. However, contracts designed around low monthly instalments can leave a much higher final payment: 20%, 30% or sometimes 40%.

Long-term rental works differently. Returning the car is normally the default. An option to buy may only be offered towards the end of the contract, and the price is not always fixed beforehand. It can reflect the vehicle’s current market value, so do not assume you will be able to acquire it for a token amount.

Check the following:

• the contract end date and deadline for notifying the provider of your decision;

• the purchase price excluding and including VAT;

• any mileage allowance;

• the vehicle damage assessment rules;

• whether servicing had to be completed within a specified network;

• charges for missing documents, keys, equipment or tyres;

• whether the agreement can be extended or the final purchase financed.

One practical point: do not rely solely on a payment schedule issued several years ago. Ask the finance provider for an up-to-date final settlement. It may include administration fees, outstanding payments, insurance costs or excess-mileage charges.

When does buying the car make sense?

Purchasing the vehicle is a natural choice when its history is known, it has been looked after and it still suits the business. A familiar car can be a safer bet than an unknown example from the used market. You know who drove it, how often the oil was changed and whether that minor collision really was minor.

First, compare the purchase price with the car’s realistic market value. Not the highest asking price you can find online. What matters is the amount a comparable vehicle could actually sell for after accounting for mileage, engine, equipment and accident history.

Consider a Skoda Octavia with a purchase price of PLN 28,000 net, while comparable cars are offered at around PLN 65,000–70,000 gross. Keeping it will usually make financial sense. The calculation looks different if the purchase price of a BMW 5 Series is PLN 95,000 net, the car has covered 190,000 km and it is approaching an expensive transmission service, a brake replacement and a new set of tyres. The gap between the purchase price and online listings does not tell the whole story.

Cash or another finance agreement?

A high final payment can put more pressure on cash flow than the lease itself. A company may have paid PLN 1,400 net per month, only to discover that taking ownership of the car requires another PLN 45,000. Not every business wants to tie up that much cash.

Depending on the contract, it may be possible to finance the purchase or sell the vehicle to a third party that will handle the end-of-lease settlement. Check the lessor’s procedure first. Not every finance company allows the customer to nominate a buyer freely, and some charge a fee for doing so.

Tax can change the calculation

If the car is purchased by the business, the invoice is issued to the company or sole trader. The treatment of VAT, business expenses and any depreciation will depend on factors including the vehicle’s value, how it is used and the legal form of the business.

A private purchase is no longer a straightforward route to a quick tax-free sale either. If the vehicle was previously used for business purposes, extended time limits and specific tax rules may apply to its subsequent disposal. Polish tax regulations in this area have changed in recent years, so confirm the chosen route with your accountant before the purchase invoice is issued. Not afterwards.

With a consumer lease, the calculation is simpler because there are no business costs or deductions to consider. Focus on the gross purchase price, the car’s market value and the servicing bills likely to follow.

Replacing the car: another monthly payment, but a newer vehicle

Replacing the vehicle does not automatically leave you better off financially. What it can provide is predictability. You return the current car, or purchase and sell it, before moving into another agreement.

This approach makes sense when the car is beginning to cause downtime, its warranty is expiring or the company’s needs have changed. A two-person business may have grown into a team that needs a Skoda Kodiaq rather than a Toyota Corolla. A courier who previously managed with a compact van may now require a larger Ford Transit or Renault Master.

Do not compare monthly payments alone. Include the initial contribution, final purchase price, insurance, servicing and expected depreciation. A payment of PLN 1,050 net with a high final purchase price is not necessarily cheaper than PLN 1,350 with a 10% purchase option.

A newer used car is often a sensible middle ground. A vehicle first registered between 2022 and 2024 has already absorbed its first, and usually steepest, drop in value, while still offering modern safety systems and potentially a fully documented service history. That history needs proper verification. Shiny paint is no substitute for a vehicle report, an inspection and a test drive.

Returning the car without an expensive surprise

Returning the vehicle is convenient when you do not want to keep it or the purchase price is too high. That does not mean you can simply leave it outside the leasing company’s office.

The car will be inspected against the condition standards set out in the agreement. Normal wear and tear should be accepted, but the line between wear and damage is not always clear. A deep scratch across two body panels, a cracked windscreen, a dented sill or damaged upholstery may all result in charges.

Carry out your own inspection before returning the vehicle. Wash it, then photograph the bodywork, interior, wheels and odometer. Collect both keys, the registration document, manuals, service records and every item supplied with the car. If the contract included a set of winter wheels, they need to go back as well.

Repairing every scratch yourself is not always the cheaper option. A low-cost paint repair may fall below the inspector’s standard, leaving you with both the repair bill and a charge on the return report. First compare the likely fee with the finance provider’s return criteria. For long-term rental, check the mileage too. Exceeding the allowance by 20,000 km at PLN 0.40 per kilometre means an additional PLN 8,000.

Do not sign the inspection report without reading it. If you disagree with the description of any damage, record your objection on the document and retain your photographs.

Make the decision using four numbers

Base the decision on four figures: the final purchase price, the car’s realistic market value, its expected servicing costs and the total cost of the next agreement.

Buying has the advantage when the price is attractive, the vehicle has a proven history and it can remain in service for several more years without major repairs. Replacing it suits a business that needs predictable costs, warranty cover or a different type of vehicle. Returning the car removes the task of selling it, but requires careful preparation for the inspection and mileage settlement.

There is also a middle route: purchase the car and then sell it. This can produce a surplus when the purchase price is clearly below market value, but it is not an automatic profit. Taxes, preparation costs, the time required to find a buyer and price negotiations all need to be factored in.

If a bank has declined finance for the next car, do not assume you have no choice but to keep the current one. The refusal may relate to the company’s industry, its short trading history, an overdue payment recorded in a database or simply that institution’s credit policy. Approval elsewhere is never guaranteed, but leasing providers do assess risk in different ways.

Use the Carmore calculator to see how the monthly payment for a selected used car could change with different contract terms and initial contributions. If a bank has declined your application or offered unacceptable terms, speak to an adviser. We will compare the viable routes, keeping the current car, replacing it or financing another one, without pretending that every application ends in approval.

Images (manufacturer press materials)

• Skoda Octavia after several years of business usea car photographed in an office car park, illustrating the choice between purchasing and replacing it.

• Toyota Corolla at an authorised service centrea maintenance inspection carried out before the decision to keep the car.

• BMW 5 Series during a bodywork inspectiona close-up of a wheel, paintwork or the interior showing the areas that may be assessed when the vehicle is returned.

• Ford Transit or Renault Master at workan image supporting the section on changing business needs and replacing a commercial vehicle.

Images should come from manufacturers’ official press centres or media websites. Before publication, confirm the licensing terms and whether the material may legally be used in editorial content.