Car Leasing Frequently Asked Questions

Commonly asked questions about leasing a car below.

Q1. What options are available if I want to end my lease early?

• Purchase the car or truck (vehicle)
• Sell the vehicle
• Trade the vehicle in for another lease or towards the purchase of another car
• Arrange a lease assumption, or transfer your lease. Seek out other consumers seeking to take over a car lease for the remainder of your lease agreement – short-term auto lease.

Q2. When the lease agreement expires, what are my options?

• Purchase the car or truck (vehicle)
• Sell the vehicle
• Trade the vehicle in for another lease or towards the purchase of another car
• Extend the lease term of your vehicle
• Return the vehicle to the dealership / leasing company

Q3. What are your responsibilities for the vehicle’s lease maintenance?

The consumer who is leasing the vehicle is 100% responsible for the vehicles maintenance. Ensure you understand the warranty agreement on the vehicle. Once this warranty expires, the onus of the vehicle maintenance costs is on the consumer. Many manufacturers outlined a recommended maintenance schedule to help ensure your vehicle is in top performance.

Q4. What are your responsibilities for the vehicle’s insurance?

All vehicles are required by law in their appropriate state or province to hold vehicle insurance. The insurance costs and subject to the drivers records and the vehicle. Check your leasing agreement for exact insurance coverage changes.

Q5. What happens if you exceed the maximum miles or kilometers stated in your lease agreement?

Check the lease agreement as most, if not all lease agreements, will have stated your maximum mileage allowed. Upon returning the vehicle at lease end, the miles / kilometers will be reviewed and any excess mileage over and above the stated maximum mileage in your lease contact will be subject to excess charges.

If you end your lease early by transferring the lease agreement to another consumer, then you rid yourself of any liabilities of additional charges incurred on exceeding the maximum mileage allowed since the new person taking over the car lease will take over full responsibility of the lease contact and vehicle.

Q6. Can someone else take over the lease while in the lease contact with the leasing company?

Yes – if you can find someone else to transfer your car lease and take over the remainder of the lease term. There are available services that can help people transfer their car lease and find individuals seeking to get into a short term car lease.

Q7. If I live in the USA , can I take my vehicle out of the country?

No. Most lender umbrella insurance will now allow individuals to take their leased vehicle out of the country. Some leasing companies in different states (and provinces) may have rules and regulations in their policies that allow to take the vehicle out of the continental area.

Q8. What happens if I move while I’m in a vehicle lease contact?

If you decided to move outside your province or state that you’ve leased your vehicle, you should contact your dealer in ample time to help take the proper steps to assure your vehicle is properly registered when moving. Some states and provinces require additional fees and taxes to be paid when registering in the state or province.

Q9. What happens if the vehicle is wrecked in an accident, but not totally written-off?

Contact your insurance and leasing company, or dealership, immediately. They will help with the process of getting your vehicle fixed, and in some cases, help with determining if the vehicle is actually a write-off.

Q10. Can a Lease-Take-Over vehicle be purchased rather than assumed?

Yes.  All vehicle lease packages can be paid out prior to the expiry date.  In order to determine how much it would cost to buy-out an existing lease, simply call the original lessee and request they call the leasing company for the pre-tax current buy-out of the lease.  Upon receipt of the buy-out, you can start the negotiation process with the original lessee.  Here a couple of important notes to remember:

1. You will (in the majority of cases) be actually purchasing the vehicle from the original selling dealership – not the original lessee or the leasing company.
2. The transaction will be subject to both provincial sales tax and the goods and service tax (PST & GST).
3. The original selling dealership will always attach an administrative fee to the final selling price in order to be paid for their participation in the transaction.
4. If the lease buy-out amount exceeds the negotiated selling price; the original lessee must agree to subsidize the net difference between the two amounts.  For example, if the lease buy-out is $30,000.00 and the agreed selling price of the vehicle is $27,500.00 – the original lessee must supply a buy-out subsidy cheque for $2,500.00 plus applicable taxes in order for the transaction to close.
5. If a “deal-in-principal” is made between the prospective buyer and the original lessee, it is vital that the original lessee both coordinates and engages the original selling dealership representative for their required assistance in the closing of the transaction.  

Q11. How much does the new-car dealership or the leasing company charge for the lease transfer fee?

The transfer fee varies from leasing company to leasing company (and dealer to dealer).  If you are looking to get-out-of you lease, call the business manager of your original selling dealership and request a lease-transfer-fee quotation.  If you are looking to get into a lease and the lessee is requesting that new-lessee pay the transfer fee, simply speak to the lease-owner (lessee) directly and request the amount.

Q12. The vehicle that I am interested in is in another province/state; can I still take-over that lease?

If the leasing company is a national company – (and all factory/manufacturer’s leasing companies are all national companies) – then any and all cross-provincial / state Lease-Take-Over transactions are perfectly acceptable.  

Q13. What is the process of taking over a vehicle lease from another province or state?

Any transportation costs can be negotiated with the original lessee; most original customers are very motivated to move their leases and may incur other costs in order to have their leases taken over – a perfect example of this is the significant cash incentives that several customers are currently offering. 

If you find a vehicle that you like and would consider, you simply discuss your geographical situation with that customer and make an offer that includes the shipping of the car. 

It’s important as a consumer to due diligence. Have the original customer get the car inspected (physically and mechanically) by the original selling dealership.  Have the results of the inspection faxed or emailed to you for your review. 

Q14. Take over a vehicle lease – what is the process? What legalities should the consumer be aware?

All lease transfers are credit-approved legal transfers sanctioned by the Leasing Company.  The original selling dealership must participate in the transfer as they are the selling agent for the Leasing Company.  The following is the order of operations:

• Inspect, test-drive and discuss the vehicle with the original lessee
• Make a deal-in-principal with the original lessee (included who pays for transfer fees, inspections, security deposits, cash incentives and/or down payments).  The deal is subject to credit approval.
• Complete a credit application and submit it to original selling dealership.
• The dealership will submit to Leasing Company and wait for credit decision.
• Upon receipt of credit approval; the dealership and the two retail parties (original lessee and new-lessee) coordinate a delivery and signing date.

Q15. What should the consumer do if the leasing company indicates the covenant must remain on the lease in the case where someone else takes over the lease?

If your leasing company (the lessor) has that particular draconian policy you can proceed forward keeping the following in mind.

• If the new customer's credit is as good as or better than yours, the leasing company will release you (they will claim on an exception basis). 
• The bottom line consists of two final points; (1) If the new customer could qualify for a new lease from that leasing company; why would the leasing company want your covenant to remain on the lease and (2) If the leasing company approves the new customer, they would not stand a chance at getting any money from you in court because they (the leasing company) approved the credit of the assignee (define: assignee) originally.  This fact is why GMAC and other companies removed that policy.  Furthermore, as Lease-Take-Overs become more popular, the other companies will have no choice but to remove this policy - especially for the sake of customer service.

Car Leasing Glossary of Leasing Terms