5 Lease Restrictions To Keep an Eye On

Nothing reminds you that you’re subject to car lease restrictions and don’t actually own your car like being slapped with extra fees at the end of a lease term.

The benefits of a lease program; lower payments, a new car every three to four years, and no obligation, can sometimes be outweighed by restrictions that are hard to live with. A leased vehicle belongs to the financing company, often an automaker-backed financing source, and with that comes some rules you must live by if you want to drive the car and walk away clean at the end of your lease.

Car Repairs are Best Completed at the Dealership

There is language in most lease contracts that limit the type of parts that can be used in your leased car. Most automakers demand you use genuine OEM parts and not aftermarket items. They do this to ensure the car has the highest resale value when it comes back to the dealership to be part of the used car inventory at the end of your lease term. If you do need to have your car repaired at a third-party mechanic ship, you’ll need to demand genuine OEM parts and explain the car is a lease.

Thankfully, during your lease term, most of the repairs will fall under the warranty of the vehicle. This might be one of the lease restrictions that’s a little easier to live with. The most difficult time to deal with this restriction is if you’re away from your home area and not near a branded dealership service center.

Tires are Extremely Important and Part of Your Lease

Tires are a consumable part of the vehicle you drive, which might make you turn a quizzical look when you think about these items on your vehicle. Shouldn’t you be allowed to put whatever tires you want on your car? Just because tires are consumable, your lease contract states they must match. Some contracts allow for the front tires to be one type and the rear to be another, but not from one side to the other.

The best way to avoid an extra fee when you return your leased vehicle is to put a set of four matching tires on the car before you return it. There might be restrictions regarding the brand and type of tires, which you need understand when you drive a car through a lease program.

Forget Adding a Better Sound System or Engine Modifications

One of the most direct and understandable lease restrictions you’ll face is the inability to modify or customize the vehicle. Some automakers allow a few customized parts on some vehicles, but the list is typically pretty short as is the number of vehicles that allow for customization. If you’re thinking about adding an upgraded stereo, louder exhaust, or special graphics to your leased car, you’ll need to think about buying instead.

If you think you’ll get away with a few modifications during the lease period and then change them back at the end of the lease, think again. This is where Murphy’s Law steps in and you’ll end up at the dealership for repairs and then a bill for the complete buyout of the car because you customized the vehicle and the dealership doesn’t want it returned at the end of the lease.

The Buyout Price is Locked In

This is one of the few lease restrictions that can benefit you or the dealership depending on the automotive industry. Currently, the pandemic caused a shortage of cars and car parts, which means used vehicles are a hot commodity. Those who signed a lease contract three to four years ago could buy those vehicles at prices that are well below current market value because of the buyout price listed in the contract. This puts dealerships at a disadvantage right now.

On the other hand, if you enter a lease contract right now and the market normalizes, the buyout price doesn’t change. You’re still locked in at the higher price associated with the current market shortage of new vehicles. This restrictive aspect of the contract means you’ll likely only want to return the car and forget about buying it outright at the end of the lease term.

Forget Heading for the Border

This is more of a border restriction than one associated with your lease contract. While we don’t know how many leased cars have crossed into Canada or Mexico to be hidden from the dealers and finance companies, we would guess this doesn’t happen often. Even so, some border patrol agents might turn you around at the Canadian border if you drive a leased car.

Of course, this restriction is more likely to result in a limited stay in Canada. If you’re driving a leased car across the border, you might be limited to a stay of only 30 days when you drive a leased car. This might not be a big problem for most people, but it does prevent foreigners from leasing a car in the United Stated and living with it in Canada or Mexico.

Your Leased Car Isn’t a Ride-Share Car

Every lease program has a mileage restriction, which is one reason you can’t use a leased car as a ride-share service. Also, the car you lease is meant to be your private vehicle, not a vehicle for commercial purposes. The number of people that could spend time in the rear seat could create serious problems when you want to return the car at the end of the lease program.

One of the lease restrictions you might not understand is the inability to use it as a ride-share car. Even though a lease program is essentially a rental program, you can’t use your leased vehicle this way. If you have a side hustle of offering rides via Uber or Lyft, you can rent a car from one of these companies for this purpose. This will keep you out of trouble with the lease company.