Lease Disposition: What It Is, Definition & Meaning 

Spelling: lease dis·po·si·tion 

What Is Lease Disposition? 

Lease disposition refers to the process of returning your leased vehicle to the leasing company upon completion of your contract. It typically involves a final inspection, the payment of a disposition fee, and the resolution of any excess mileage or wear-and-tear charges. Knowing what lease disposition means helps drivers avoid surprises at lease-end. 

Lease Disposition Meaning in Car Leasing 

In car leasing, lease disposition specifically applies to the end-of-term return process.  

When you decide not to buy out your lease, the vehicle goes through disposition, which covers: 

• The cost for the leasing company to prepare and resell the car 

• Your responsibility for paying the disposition fee (commonly $300–$500) 

• Any additional charges for mileage or condition issues 

This term is crucial for drivers who plan to return their leased vehicle instead of purchasing it. 

How Lease Disposition Works 

Here’s how lease disposition usually works: 

1. Pre-return inspection: Your leasing company may require or offer a pre-return checkup. This gives you time to address damage or mileage concerns 

2. Vehicle return: On return day, you hand in the keys, complete a final inspection, and provide any required documents 

3. Fee assessment: The disposition fee is charged, along with any other costs like excess mileage or wear-and-tear charges 

4. Vehicle resale: The leasing company prepares the car for auction or resale, which is what the fee helps cover 

Pro tip: If you plan to lease or buy another car from the same company, ask if the disposition fee can be waived. 

Lease Disposition in Car Leasing Agreements 

You’ll see lease disposition explained in the end-of-lease section of your contract. It often includes: 

• The disposition fee amount you’ll owe if you return the vehicle 

• Conditions for waiver (such as leasing another car through the same brand) 

• Your responsibility for final charges, such as damage or extra mileage 

While the fee itself is rarely negotiable upfront, some automakers and lenders remove it as a loyalty incentive. 

Common Lease Disposition Fees and Costs 

Here are the most common charges associated with lease disposition: 

• Disposition fee: $300–$500, covering resale prep and paperwork 

• Excess mileage fees: $0.15–$0.30 per mile above your contract limit 

• Wear-and-tear costs: Scratches, dents, upholstery damage, or bald tires 

• Unpaid balances: Missed or remaining lease payments 

Example: If your lease allows 36,000 miles and you return the car at 40,000, you’ll owe 4,000 extra miles. At $0.25 per mile, that’s $1,000 in charges, on top of the standard disposition fee. 

Related Terms in Lease Disposition 

• Previous term: Lease Buyout Options 

• Next term: Lease End 

• Also related: Lease Return, Lease Purchase Option 

How Lease End Department Helps Beyond Lease Disposition 

Lease disposition doesn’t have to be the only path when your contract ends. Many drivers discover that choosing a lease buyout option is smarter than simply returning the vehicle.  

If your car’s market value is higher than the residual price, a lease buyout could save you money, or even create equity you can put toward your next car. 

At Lease End Department, we: 

• Review your lease terms and highlight whether a lease buyout option makes financial sense 

• Provide tools to get pre-approved for a lease buyout loan so you don’t need to pay cash upfront 

• Handle the paperwork, title transfer, and even ship your plates right to your door 

Instead of paying fees through lease disposition, you may benefit more by turning your lease into ownership with a lease buyout loan. Our team helps you compare both scenarios side by side, so you can make an informed decision with confidence.