What are your rights when transferring a lease?
To put things into context, let's define what a lease transfer is. A leasing transfer is the early termination of a contract, whether your lease is a LOA (lease with option to buy) or a LLD (long-term lease). It is therefore entirely possible for you, as an individual, to break your contract early.. It's a more advantageous way to be released from your commitment before the end of your contract.
The transfer of leasingconsists in transferring your leasing contract to a new buyer, who will be committed to your vehicle for the remaining term of your contract. The transferee undertakes to take over the same amount with monthly payments already agreed with the financing organization.
How complicated is it to break a leasing contract?
Of the two types of contract, think again, The long-term leasing contract is the simpler to terminate. As mentioned above, the lessee can terminate the contract of any kind. Let's start with long-term leasing. Long-term leases vary from 1 to 5 years. It is, however, not without its drawbacks.
Despite certain beliefs, it is not uncommon for a tenant not to bring his or her contract to an end. The reasons for this are usually quite common, such as a withdrawal of license or a breach of employment contract. However, the lessee may also have to terminate his or her long-term rental contract for entirely different reasons. These may be personal (bank loan outstanding, marriage, moving house, road accident), professional (change of profession), economic (bankruptcy, liquidation) or even legal (imprisonment).
there is no purchase option, which means that the only possible solutions are :
- early return of the vehicle (resulting in substantial financial losses and penalties)
- or the transfer of leasing
Did you know ? Today, there are specialized companies such as "transfertleasing.fr" that put people interested in taking over a lease in touch with those wishing to break their current contract. A win-win situation for both parties.
If you find yourself in one of the above situations, we can only strongly recommend that you break your contract as soon as possible. That way, you won't have to pay penalties on top of the monthly payments you owe your lessor, and you won't find yourself in a tricky situation!
It should be noted that this termination can be carried out by the leasing company directly, without the tenant's consent. This is the case if the individual or legal entity is unable to pay the monthly rent. The leasing company will then be within its rights to demand compensation and, logically, the return of the vehicle(s) in question.
What about the LOA contract? We explain everything
A lease with purchase option is quite different from a long-term contract. Quite popular with lessees, it is often chosen for its many advantages, not least of which is the possibility of purchasing the vehicle in question at the end of the contract. The second notable advantage is the possibility of starting a new lease at the end of the term with a different car. A good compromise if you want to change electric vehicles on a regular basis .
However, termination solutions for this type ofcontract are particularly costly for the lessee. Depending on the tenant's situation, they may not be very financially advantageous. There are 4 ways to free yourself from your current contract:
- Returning the vehicle to the financing company This solution is the most expensive of all. You'll have to pay all the remaining monthly installments. As a result, you'll have to pay monthly installments without yet being able to use the vehicle, since you had already returned it.
- Buying the car before the end of the contract The early purchase option is a possible solution, but it's a disadvantage. The law of supply and demand and the popularity of the model throughout its life mean that the first two years depreciate its value considerably. A very popular vehicle like the Peugeot e-208 will therefore depreciate less than other equivalent, less popular cars. But in general, this solution is not really optimal and interesting, as the purchase option will always be higher than the used market price.
- Selling the vehicle after exercising the purchase option: as mentioned above, you can exercise the purchase option and acquire 100% of the vehicle, then resell it to a private individual or a professional on the second-hand market.
- The transfer of leasing This is still the most financially advantageous solution. Whichever method you choose to break your lease with purchase option, there will be a certain cost involved.
In conclusion
As you can see, the simplest solution is to think carefully before committing to a leasing contract. It's not a trivial choice, because as we've seen in this article, both contracts are packed with conditions and benefits that most people are unaware of. Bear in mind that, although binding, breaking both contracts will necessarily have financial consequences for you. You have everything you need to limit these consequences as much as possible. We can only advise you not to be too hasty when you decide to opt for along-term lease or a lease with purchase option, so that you are aware of your rights and obligations.
For more information, we've put together a guide to this topic to explore the different aspects in depth:
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