Car lease transfer: a complete guide to the process and steps

Car lease transfer represents a practical solution for those who want to disengage from the financing contract before its term. Whether the reason is financial, or you simply want to change the car earlier, this option can be advantageous for both you and the person taking over the contract.

The process consists of transferring the lease contract to another person, physical or legal entity, who will assume payment obligations for the remainder of the contract term. In exchange, the assignor typically receives a cash sum to partially compensate the initial investment.

How the car lease transfer works

Parties involved in the process

The lease transfer is carried out through a novation contract signed by three parties:

• Leasing company - the entity that legally owns the vehicle
• Assignor - the person who cedes the lease
• Assignee - the person who takes over the contract and its obligations

Conditions needed for transfer

For the process to take place, all invoices related to the contract must be up to date. There must be no arrears at the time of the transfer. Additionally, approval by the leasing company is mandatory - it assesses the assignee’s financial capacity using the same criteria as for initiating a new contract.

Advantages and disadvantages of car lease transfer

Benefits for the assignor

Transfer of the lease presents several significant advantages:

• Elimination of financial obligations - you are no longer required to pay monthly installments and the mandatory Casco insurance
• Reduction of maintenance costs - you are freed from the costs of [car maintenance] and consumables, repairs and service
• Improved credit capacity - reducing the debt burden allows you to obtain new leasing financing if you wish
• Financial flexibility - you can redirect the budget toward other priorities

Disadvantages of the process

There are also negative aspects to consider:

• Potential financial losses - the difference between the amount negotiated with the assignee and the car’s actual market value
• Loss of paid installments - the money invested up to the transfer moment is not fully recovered
• Dependence on leasing company approval - the process can be delayed or rejected

The car lease transfer process

Step 1: Finding an assignee

The first step is identifying a person interested in taking over the contract. The assignor can:

• Post ads on auto marketplace sites, specifying that the sale includes lease transfer
• Contact acquaintances who might be interested
• Use intermediaries specialized in such transactions

Step 2: Evaluation of the assignee by the leasing company

The leasing company analyzes the potential assignee’s financial situation using criteria similar to those for a new contract:

• Monthly income and its stability
• Credit history
• Other existing financial obligations
• Ability to pay installments until the end of the contract

Step 3: Approval and signing the contract

If the response is positive, the leasing company:

• Invoices the novation fee (the analysis commission)
• Prepares the novation contract
• Arranges the meeting for signing the documents

If the response is negative due to insufficient income, the assignee can:

• Present a guarantor to back them
• Improve the financial situation and reapply
• The assignor can look for another assignee with a stronger financial standing

Costs associated with lease transfer

Novation fee

This represents the main cost of the process and includes:

• Analysis commission - paid for evaluating the assignee
• Administrative charges - for preparing and processing the documents
• Variable rate - each leasing company sets its own tariffs

Who pays the costs?

The novation fee can be paid by:

• The assignor - if they want to facilitate the transaction
• The assignee - as part of taking over the contract
• Split between the parties - according to their negotiation

Setting the transfer amount

Factors influencing the price

The amount the assignor receives depends on several factors:

• Negotiation power between assignor and assignee
• Value of paid installments versus those remaining
• Vehicle condition - mileage, service history, damages
• Market situation in the [second-hand market] at the time of the transaction
• Make and model - some vehicles retain value better

Ways to determine the price

1. With a specified amount - the final price is stated in the novation contract
2. Without consideration - the transfer is done free of charge for the assignor
3. Direct negotiation - the parties agree on the amount through bilateral discussions

Important aspects regarding insurance

Casco insurance

• It automatically transfers to the new user according to the contract
• The assignee assumes the obligation to pay the insurance premiums
• Benefits remain valid for the entire policy duration
• A new Casco policy is not required

RCA insurance

In contrast to Casco:

• The existing policy in the assignor’s name is cancelled
• A new policy is issued in the name of the assignee
• The assignee must handle this formalities
• The cost is borne by the new owner

Recommendations for a successful process

For the assignor

• Prepare the necessary documentation in advance
• Keep the car in good condition to maximize the transfer price
• Inform yourself about the fees and commissions of the leasing company
• Negotiate strategically to obtain the best price

For the assignee

• Check the vehicle history before accepting the takeover
• Ensure you meet the leasing company’s criteria
• Calculate total costs including the remaining installments and fees
• Obtain a professional technical evaluation of the car

Conclusions

Car lease transfer is a flexible solution that can be advantageous for both parties. The assignor is freed from financial obligations and can redirect the budget, while the assignee gains access to a vehicle without committing to a long-term contract.

The success of the process depends on careful preparation, understanding all costs involved, and finding a balance in negotiation. It is essential to work with the leasing company to ensure all procedures are followed and the transfer proceeds smoothly.

Before making this decision, carefully assess your personal financial situation and ensure you understand all implications of the car lease transfer process.