Can a car lease be transferable?
There might be a time when you want to transfer your car lease. Which means you will want to know whether you can transfer your car lease to someone else.
You can, but there are some things that you should know first. We don’t go through this process often but it has happened in the past. So, in this article, we are going to talk about whether you can transfer your car lease, and what you can do if you cannot transfer your car lease.
Can I transfer my car lease?
If you want to transfer your car lease to another person then this is possible. However, there are some restrictions.
You can only transfer the contract if it is a certain contract. You can only transfer business contract hire, personal contract hire and business operating lease. And you can only transfer the contract if it stays the same. For example, if you have a business contract hire in a limited company name, then you have to transfer it to another limited company. Or, if you have a personal contract hire then you can only transfer it to an individual.
However, whether you can transfer your car lease depends on the funder. Not all funders will allow you to do this so you will have to check with them.
How do I transfer my car lease?
If your funder will allow you to transfer your car lease then this is what will happen;
The person, or company, who is going to take over your lease contract will have to be approved by the funder. Just as they would taking out a brand new lease contract. If they are declined, then you can’t transfer the lease to them. When they are approved, however, you will have the ok to transfer the lease contract over.
The chances are, the funder will charge a fee for this transfer. It varies from funder to funder so we can’t say how much it will be. However, be prepared to be charged for this transaction. When you transfer a lease contract you are agreeing on condition of the car to this new person or company.
The person who the lease is being transferred to will be responsible for looking after the car as if they had it from brand new. You will ring the finance house with the mileage of the vehicle and the name and details of the person who wants to take over the lease contract. The finance house will send out a finance application form which will be filled out accordingly.
When everything is agreed, the finance documents will be sent out to the new person. You can read about processing your lease documents here. When the finance documents have been signed and completed, the vehicle will be delivered to the person taking over the lease.
It is important that you have written confirmation from the finance house that they accept that the contract has been transferred and you are no longer liable.
The payments will stay the same, as will the mileage. You cannot change the remaining balance or the duration of the contract. Everything will have to stay the same.
The process is complicated, we’re going, to be honest. We recommend that you avoid it if you can because it can be arduous and can get confusing.
What are the alternatives?
If the finance house doesn’t allow you to transfer your lease contract then you will have to end your contract.
You do this by contacting your finance house and asking them for a settlement figure. The settlement figure depends on a number of things including;
- How many miles the vehicle has done
- How far into the contract you are
- The type of car
- The market value of the car
- How much the car has depreciated
So we can’t give you an exact figure. But you will have to pay this off if you want to end your contract early.
The finance house will give you a settlement figure and you will pay that off. After that, the vehicle is yours. You can then sell it or keep on driving it, the choice is yours. You can read more about what happens if you want to buy your lease car at the end of your contract here.
What happens if I can’t afford to buy my lease car?
If you want to transfer your lease contract because you cannot afford the payments then naturally, you will not be able to afford to buy the car off the finance house.
In this case, you will ring the finance house and tell them you cannot afford the payments. You will have to ask if they will give you a break for a month or two, though it only will be for a month or two it is unlikely that you will get a break for any longer and this will be marked on your credit file.
Or, you could get a purchase price from the lease company, the same as above. You will then have to try and sell the car to cover the purchase price. Or, at least the majority of the purchase price and top the rest up yourself. This protects your credit score and reputation.However, we do urge you that if you think you will run into trouble, please tell the funder or ring us. We would much rather that you make us aware of the situation before it gets out of hand. It is much easier to deal with this sort of thing before it escalates into missed payments and marks on credit score. We are a friendly bunch, and it’s our job to help you.
In conclusion, it is possible for you to transfer your lease contract. However, it is down to whether the funder allows, and is a complicated process. And, it only applies to certain contracts. We would not recommend this option for many people. Instead, we would recommend that you ask the finance house for a settlement figure and go from there. If you cannot afford the settlement figure, then you will have to find someone to buy the car off you to make up that fee. If you think that you are going to run into trouble, please do not hesitate to contact us before you do. It is better to make us and the funder aware of the situation before payments are missed and you are being chased for money. Also, if you are unsure what to do regarding transferring your lease car, then you can ring us beforehand and we will be happy to weigh up your options. If you have any questions, please do not hesitate to call us, or request a call back via our contact form below.
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Hi- I have a personal car lease but upon setting up my limited company, can I transfer it accordingly?
Hi Iblal, thank you for your query. We would advise getting in contact with your funder for further information about this. We hope this helps, do you have any further questions?
I have car lease on my business name but I am shutting down the business because of the lack of funds. Can I pay the monthly instalments of the car lease from my personal account?
Hi there Anshu, thank you for your query. We would advise getting in contact with the finance house and asking to change the direct debit. We hope this helps, do you have any further questions?
I am looking at options to transfer one of my two leases into my wife’s name as she is the primary operator of the vehicle.
Thank you for your comment. As per the article, the ability to transfer a lease depends on the type of lease you have and the Finance House. Not all countries are the same, so we would definitely recommend you contact your Finance House to find out if this is something that they allow.