Transferring a Lease Vehicle to Another Person
By DonnaIf your personal circumstances have changed during the term of your car leasing contract, you may be wondering what options are available to you. In addition to extending, amending or terminating your lease contract early, some finance providers may also allow you to transfer the leased vehicle to another person. This is known as a Lease Transfer or a Transfer of Contract.
NB: A Transfer of Contract is at the discretion of the finance provider. Please note, Nationwide Vehicle Contracts are unable to assist with Transfer of Contract requests. To request a Transfer of Contract quotation, please reach out to your finance provider direct.
A Transfer of Contract can be a confusing process as they are often dealt with on a case-by-case basis. This makes it difficult to determine how long the process takes and details regarding eligibility. To help make the process easier to understand, Nationwide Vehicle Contracts explain how a Transfer of Contract works, why you would need it, and the criteria, fees and the process involved.
Can you transfer a car lease to another person?
Some finance providers will allow you to transfer a car lease to another person, provided you meet specific criteria. This is known as a Lease Transfer or a Transfer of Contract.
Typically, to be eligible for a Lease Transfer, you must:
- Be a private customer on a regulated finance agreement (such as Personal Contract Hire)
- Have more than 12 months remaining on the car lease contract
- Be up-to-date with your vehicle rental payments
- Have the details of a new lessee who will be taking over the car lease contract
How does a Lease Transfer work?
A Lease Transfer is the formal movement of a personal lease vehicle to another person. A Lease Transfer typically applies when:
- A personal customer wants to transfer the leased vehicle to another personal customer
- A personal customer wants to transfer the leased vehicle to a Limited Company
With a Lease Transfer, the same parameters of the original agreement still apply (e.g. the monthly payments, term, annual mileage and contract type remain the same), but the new lessee assumes full responsibility for the leased vehicle.
Why would a Lease Transfer be required?
There are several reasons why a customer may want to request a Lease Transfer, such as:
- A change to personal circumstances (such as relocation or redundancy)
- A need to break from your lease contract early (where early termination is not appropriate)
- Allowing the new lessee to secure a vehicle without paying initial rental costs
“A Lease Transfer is when a driver transfers their lease contract to someone else. Lease transfers are popular in the US but less so in the UK as it isn't always available with the finance provider, and transfer costs may apply.”
What are the advantages of a Lease Transfer?
A Lease Transfer offers many advantages for both the existing contract holder and the new lessee.
Advantages of a Lease Transfer:
No early termination fees
A Lease Transfer allows you to exit the terms of your lease contract early without paying hefty early termination fees.
Known vehicle history
The new lessee gets to drive an almost new vehicle with a known vehicle history and the balance of the manufacturer's warranty.
No initial rental fees
The new lessee does not need to pay an initial rental as required with a new lease, as all the upfront costs have already been covered.
Contract parameters stay the same
The contract term, monthly rental, annual mileage and contract type remain the same, allowing the new lessee to take advantage of the original car lease deal.
What are the disadvantages of a Lease Transfer?
As with every type of contract amendment, a Lease Transfer may not be suitable for everyone, so be sure to consider whether this option is right for you.
Disadvantages of a Lease Transfer:
Case-by-case consideration
The option to transfer your lease vehicle is at the discretion of the finance provider and is not available with every finance provider.
Eligibility restrictions
You must meet certain criteria to be eligible for a Lease Transfer, including financial eligibility.
Time-consuming
The Lease Transfer process can be time-consuming, taking up to two months to complete from start to finish.
Admin fees apply
You will need to pay an administration fee to request a Lease Transfer. These costs vary between finance providers but average at around £480 inc. VAT per transfer.
Check responsibilities
It is essential to check if you still hold any responsibility for the car or payments after the transfer has been agreed upon. If so, early termination may be a better option for you.
Can anyone apply for a Lease Transfer?
No, because this option is not available with all finance providers. A transfer of contract is at the discretion of the finance provider and does not form any part of the customer terms and conditions or finance agreement.
Typically, a Lease Transfer will not be provided where:
- The vehicle is being moved from a Limited Company to a personal contract
- The vehicle has been transferred before
- The vehicle has less than 12 months to run on the contract
- The vehicle has outstanding debt
- The vehicle had a deferred payment added to the end of the contract due to a payment break
- The customer is in arrears or is subject to Default or Insolvency
Want to know more about transferring your car lease contract?
If you have a question regarding a Lease Transfer or want to know more about eligibility or the process involved, contact Nationwide Vehicle Contracts on 0345 811 9595 (option 4) or visit our Motoring Guides section to view other options available to you.
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