Understanding Your Options for Dealing With a Lease You No Longer Need
If you are leasing a vehicle for your small business and you either no longer need it, or you want to downsize your monthly expenses by ending your lease, then you essentially have two options available to you – you can sell the vehicle to a third party, or you can transfer the business vehicle lease to another person.
If you choose to sell it outright, then you will need to use the funds you receive from the sale to pay off the balance of the lease, or you will still be responsible for the payments until the lease’s end. Another concern with selling the vehicle is that not all leasing agents permit leasers to sell. Before doing so, you should check with the rules and regulations of both your state and your bank.
Transferring the Lease
When you transfer a vehicle lease to another party, this is called “lease assumption.” In transferring the lease, the assuming party will then become responsible for making the lease payments on the vehicle, and your relationship with the leasing company will end. Here is how to transfer your business vehicle’s lease.
Step 1: Call the Bank
Do not assume that you can transfer your lease. You first need to find out if your leasing agent allows their leases to be transferred as not all do. Call your bank and discuss the issue with them. Ask about the process and whether or not you will be responsible for any transfer fees or other charges.
If fees will be applied, then find out how much they will be before you make the final decision to transfer the lease. Make the bank aware that you are going to be transferring your lease so they can note your account. This will help ensure that the bank will accept applications on your account.
Step 2: Advertise the Vehicle
When you advertise your vehicle, you need to ensure that you state that you are looking for a lease assumption. Include details related to your lease, such as the monthly payment, the lease’s mileage allowance, and any other costs associated with maintaining the lease agreement.
If you are planning on charging the buyer for the transfer fees, then include that in the advertisement as well. Where you place your advertisements is completely up to you. You can advertise in local print and online classifieds, on lease assumption websites like LeaseTrader.com, or anywhere else you think you can find a buyer.
Step 3: Have the Buyer Apply for the Transfer
Once you find an interested party, provide him or her with your bank’s phone number and the account number for your lease. The buyer can then contact the bank and apply for the transfer. At this point, it will be the buyer’s responsibility to correspond with the bank regarding their approval.
Step 4: Transfer Ownership of the Vehicle
The bank will notify you once the transfer has been approved. At this time, you will have to pay any fees associated with the business vehicle lease transfer before it can be finalized. Once the lease transfer has been finalized, you can deliver the vehicle to the buyer, remove your license plates, and cancel your automobile insurance policy for the vehicle. Make sure you turn the license plates in to your local Department of Motor Vehicles agency, and the process is complete.