Personal circumstances changed, or just no longer happy with your lease car?
Then you'll be glad to know that it's possible to transfer your lease onto someone else.
But there's a few things you need to do first . . .
Can You Transfer a Car Lease to Another Person?
As above, yep!
Some (but not all) finance providers will let you transfer a car lease onto another person. This is known as a Transfer of Contract or a Lease Transfer.
However, you'll have to meet certain qualifying criteria.
Can Anyone Apply For a Lease Transfer?
Yes, except in cases where:
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The vehicle is being moved to a personal contract from a Limited Company to a personal contract
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There's less than 12 months left on the vehicle's contract
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The vehicle has been transferred before
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There's outstanding debt on the vehicle
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The customer is subject to Default or Insolvency or is in arrears
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Due to a payment break, the vehicle had a deferred payment added to the end of the contract
And whilst in theory anyone could get a lease transfer if none of the above apply, not all finance providers actually offer lease transfers. Yep, a Transfer of Contract is ultimately at the discretion of the finance provider and forms absolutely no part of a standard finance agreement or the customer terms & conditions.
Why Would a Lease Transfer Be Required?
There's a whole host of reasons for why you might want to request a lease agreement transfer, but here are the main ones:
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There's been a change in your personal circumstances, such as redundancy or relocation
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You're bored of or unhappy with the lease car you have and just want a change
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You want to avoid the pain of an early termination fee that would come with returning the car early
Am I Eligible For a Car Lease Transfer?
There's a number of different conditions you need to meet in order to be eligible for a car lease transfer. You'll need to:
– Be on a regulated finance agreement as a customer
– Have more than 12 months left on your existing lease contract
– Be up-to-date with all of your monthly payments
– Have the details of the person who will be taking over the lease (and they will need to have passed through the various credit checks and been approved by the finance provider)
– Be sure that the vehicle has not already been part of a lease transfer agreement
How Does the Car Lease Transfer Process Work?
There's a few parties involved throughout a car lease transfer process and a few hoops you'll have to jump through in order to get it into effect. You can expect the process to look something like the following:
1. First of all, make sure that you're eligible for a car lease transfer by checking the above
2. Contact your leasing company and request a car lease transfer
3. If accepted, the broker will then make the relevant arrangements with the finance company
4. The new lease customer will need to fill in a finance application and undergo and pass a credit check
5. You'll be asked for the current mileage on your car and for copies of your ID by the broker
6. The funder will then send a new modified agreement to the broker, who in turn will send it to you
7. Print off and sign the new agreement and send the original copy back to the broker
8. The funder will then review all of the documentation, and the transfer will be completed once they give the green light. At this stage, you'll give the new lessee (yes, that is the correct word) all of the necessary documentation for the car, including its servicing record. They'll then pick it up
Also, lease cars don't come tend to come with insurance, so you'll need to either transfer or cancel your policy (along with a lease gap insurance policy, if you have one) on your new car. Likewise, the new lessee will have to arrange their own insurance for the car that's just been transferred to them.
You don't have to do anything about road tax, however. That's covered, fortunately.
How Long Does the Lease Transfer Process Take?
The process involved in executing a Lease Transfer varies from case to case and is usually dependent on the individual finance provider, but in general, you can expect the whole process to last up to a maximum of 2 months.
The process can be sped up a little by ensuring that you have all the relevant documents to hand (such as your ID) during the finance application stages and by ensuring that all parties sign the Lease Transfer documentation as soon as possible.
For some leasing companies, the process can be done and dusted in as little as a week, whilst for others it may take a little bit longer. The timing is largely dependent upon three factors: the credit decision process, which generally takes 24 to 48 hours; the creation and processing of the necessary lease transfer documents, which generally takes 3 to 5 business days; and lastly, mail and turnaround times.
So as a general rule, take 7 to 14 days as a rough average of the time required to complete and get through the entire process. But as we say, the exact timing is always going to vary somewhat dependent on the leasing companies.
What are the Pros and Cons of Transferring Your Car Lease?
✓ You get to leave your contract early with no hefty early termination fees
✓ New leaser gets good deal on new car with low mileage and no large deposit
✓ New leaser able to secure deal with no massive long-term commitment
✕ Can be a time-consuming process
✕ Admin/lease transfer fee costs involved
✕ Chance of still having some responsibility for the car after transfer (check your contract T&Cs)
When Will My Monthly Rentals Stop and Be Transferred to the New Lessee?
The monthly payments (and everything else, for that matter) will be passed over once the Lease Transfer documents have been signed by all parties (including the finance provider's legal department), upon which point you will then be given an exact date for when the vehicle is due to be transferred. Until that time, you'll have to continue paying the monthly rentals until the Transfer of Contract is completed.
Note that only full rental invoices will be credited, so if the Transfer date happens to fall during the rental period, then the next full rental invoice period will be credited.
Lease Swapping Websites
If you don't already know a suitable driver who wants to take over your lease, then lease swapping websites can help you find that special someone.
Yep, websites like Swapalease and LeaseTrader provide extensive listings that match existing 'lessees' (yes, that is the right word) with new takers.
To list your vehicle on these sites, you'll need to know:
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Contact information, including address, email, name, phone number, etc
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Information about the vehicle that's being swapped, including make, model, year, style, features, condition, current mileage
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The details of your lease terms (as per the contract), including leasing company, monthly payment amount, lease end date
How Much Does it Cost to Transfer a Lease?
An administration fee has to be paid in order to request a Lease Transfer. The exact value of this fee will vary depending on the finance provider, so be sure to check before applying for one.
The fee for Lease Transfer could cost anywhere up to £480 (including VAT). This fee largely reflects two costs: part of which is due to the finance provider for the administration of the Transfer agreement, and the other part which represents costs incurred by Nationwide Vehicle Contracts for processing the Transfer agreement on your behalf. The Lease Transfer fee is payable by credit or debit card or via BACs payment.
Using a trading website to facilitate the transaction can typically range from £100 to £350. Usually it's a little less than what most leasing companies would decide to charge you if you returned your vehicle early.
When is the Lease Transfer Final?
The lease transfer process is made final once the leasing company receives all the required fees and transfer documents for the transaction. The relevant company will advise you on how to complete the various documents and when to submit the fees for each situation.
Am I Still Held Liable Once the Lease Has Been Transferred?
Nope.
So long as all information declared on the Lease Transfer is accurate and correct at the time of transfer and all legal obligations have been observed by the Seller, then all liability will have passed to the person taking on the lease agreement.
How are Long-Distance Lease Transfers Normally Handled?
When there's a lot of miles between the current leaseholder and the leaser-to-be, arrangements will normally be made to inspect the vehicle and get it to the other person as agreed. Although depending on company, you may see and hear of different arrangements being made, so it really just depends on the parties involved. This could involve the current leaser and the leaser-to-be driving to meet one another or having the vehicle inspected by independent inspectors.
Alternatives to Transferring a Car Lease
That in mind, besides a lease transfer, there are several other ways you can go about being free of your lease car early.
Either way, you just want rid of it, right?
Return your lease car early: A fairly straightforward way of going about it, but you'll face significant financial implications by doing it through this method. You'll have to pay an early termination fee, which isn't the case with a lease transfer. And the earlier you want to return your lease car, the higher the early termination fee is likely to be.
Buying the car: Yep, buy it and then sell it. Slightly less easy and accessible than the above option, but buying your lease car might be the way to go if you've exceeded the lease contract's mileage allowance and want to avoid any fees. And if you're not near the end of the lease contract, then the leasing company should have a payoff schedule that shows how much you’ll have to pay to make the car yours.
Summary
So yes, there are a number of ways to get out of your leasing contract early. But if you want to avoid any early termination fees in the process, then a lease transfer is certainly a good way of going about it. Just make sure that your financing company is OK with it before you take any action.
Happy transfer!
FAQs
Can another company take over a car lease?
Yes, but you would already have to be leasing the car in a company name. For example, you can't lease a car as an individual and then have a company take over the lease. The contract has to stay the same.
What is a lease transfer?
In the car leasing world at least, a lease transfer basically involves another driver taking over your lease by means of transferring the terms of the contract (and rights and obligations, etc.) over to them.
Can a car lease be in two names?
It's possible. What you'll need to do is make a joint application and have a joint contract on the lease car. But even if not, another person can still drive the car so long as they're on your insurance policy and have permission from the lease company.
Can you give a lease car back early?
Yes, but you'll generally incur heavy penalty fees for doing so.