Transferring a car lease in the UK

When you lease a car, you make a legal and financial commitment for an agreed period of time, but life doesn’t always go to plan and, for whatever reason, you may want to get out of your car lease early. If so, knowing how to transfer a car lease to a new owner could save you having to pay an early termination fee. Please read on for our tips on transferring a car lease in the UK.

Can I transfer a car lease to another person?

If your lease agreement allows it, you can transfer a car lease to another person, but there are some conditions. Not all leasing companies allow a car lease takeover, or a transfer more than once during the contract, so check your terms and conditions or call them to ask if it is possible. Some leasing companies don’t give the option for a car lease transfer, while some will impose certain terms and conditions.

In general, you usually have to have at least 12 months left on your contract and, of course, be up to date with your payments. The person taking over the lease will also have to pass a credit check as there will be a new contract in their name.

If you have a personal contract hire arrangement, then you can transfer it to another individual, or a limited company, but if it’s a lease in the name of the company it cannot be transferred to an individual.

All details of the lease, like the annual mileage limit, term of the contract and monthly payments will stay the same when it’s transferred to another person or company.

How much does it cost to transfer a car lease?

Each leasing company will set their own costs for transferring a car lease to someone else. It’s mostly an administrative expense, unless they insist on the car being returned to them for checking or if they want to do a handover to someone else. Maybe the car will need transporting to a different part of the country.

This assumes all your payments are up to date, that there is no outstanding damage to repair or other costs to consider before the car goes to the new ‘owner’ and you are not over the agreed mileage.

How does a lease transfer work?

As you’d imagine, there’s going to be a certain amount of administrative work involved to achieve a lease transfer. It should go something like this.

If you’ve checked your contract allows you to transfer the lease, you now need to inform your leasing company what you want to do. Find out what details they need from you and how long it will all take.

The leasing company will have to arrange for the finance agreement to be transferred to the new person and that will usually involve them completing an application form and passing a credit check. How long that all takes will depend on how busy the leasing company or the finance broker is. It could take hours, days or weeks.

Eventually, you’ll be able to pass the car over to the new person who will take responsibility for it – including arranging their own insurance.

Alternative ways to get out of a car lease

If you can’t transfer a car lease to another person, there are some alternative ways to get out of a car lease. Here are some details.

Early termination

You may be allowed to request an early termination from your car lease. It’s not something every leasing company offers or is keen to do. You’ve signed an agreement so are in a legal contract which they have every right to insist you stick to. They won’t want to be out of pocket by you cancelling your contract.

Unfortunately, that means that early termination is not the cheapest option to get out of a car lease. You will have to pay an early termination fee and this will vary depending on the policy of the leasing company. For example, it could range from between 50% to 100% of the payments due until the end of the lease agreement.

Other things to consider are the condition of the car and its mileage. You could be billed for any repairs and excess mileage.

Lease buyout

A lease buyout is when you’re paying off the outstanding lease payments in one go, plus any admin fees, and actually buying the car as well. A leasing company may give you the opportunity to do a lease buyout close to the end of your contract.

Lease trade-in

You can ask your lease company if you can trade-in your car (and lease) for a different model. There’s no guarantee they will be happy to do that, but at least you’re keeping your business with them rather than terminating the contract and going elsewhere.

However, if you went to a dealer and asked to trade-in your lease vehicle, you or the dealer would have to be able to do a lease buyout first to become owners of the vehicle. You can’t sell a vehicle you don’t own.

Pros and cons of transferring a car lease

How to transfer my car lease to another person in seven simple steps

Here are seven typical steps you need to take to transfer a car lease to another person:

1. Contact your leasing company to let them know what you want to do and find out what details they need from you and how long it will all take.
2. The leasing company has to arrange for the finance agreement to be transferred to the new person
3. The person taking over the car lease needs to complete a finance application form and pass a credit check.
4. You will have to pay a lease transfer fee – this varies from one company to another, but will probably be around £500
5. A transfer agreement will need to be signed and approved
6. You must continue to pay the monthly lease payments until the agreed lease transfer date
7. Arrange for the new person to collect the car – complete with all service history, keys and any cables, etc

Transferring a car lease FAQs

How long does it take to transfer a car lease?

There is a lot of paperwork and administration involved in arranging to transfer a car lease. This could take days or months, depending on how busy the lease company, its finance broker and you are. Make sure all documents are signed and returned as quickly as possible so you don’t cause any delays. This can take up to two months to complete.

When is the lease transfer final?

The lease transfer is final once the transfer of contract document is agreed and signed by all parties, then a lease transfer date needs to be confirmed.

Can another company take over a lease?

It is only possible for another company to take over a lease if it is being transferred from one company to another – not from an individual person to a company.

Can I sublease my car in the UK?

It is unlikely that your lease agreement will allow you to sublease your car. This is because you do not own the car. The leasing company will not want someone they don’t have any records of using the car.

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