FAQ

 

Q: How much does it cost to transfer a lease?

A: When a lease is transferred, the dealer or leasing company must carry out various administrative tasks (credit approval, approval from head office or other party, clerical work, new contract, etc.) and charges a fee for this work. These transfer fees vary from one dealer or leasing company to another (example: Infinity charges a transfer fee of $500 plus taxes.) If you wish to terminate a lease agreement, simply call the original dealer's head of sales and ask for the costs related to lease transfers. The seller usually assumes these costs and those associated with vehicle inspections. The original dealer must carry out the physical and mechanical inspections.

The vehicle's owner does not change, only the legal leaseholder. For example, a BMW with a lease agreement financed by BMW Group Financial Services Canada belongs to BMW Group Financial Services Canada; if the lease agreement is transferred to another person, BMW Group Financial Services Canada remains the owner of the vehicle; only the legal leaseholder changes. As a result, provincial inspections, paperwork and costs are kept to a minimum.

Q: Can a lease be transferred from another province?

A: Yes, if the leasing company is a national leasing company (all leasing companies of national brands are national companies – for example, BMW Group Financial Services Canada, GMAC, Ford Credit, Chrysler Financial, Toyota Credit, Honda Credit, etc.).

For example, residents of Quebec, Alberta and British Columbia can take over lease agreements from Ontario and vice versa. You can find a vehicle anywhere in Canada.

You can also use the services of a recognized transport company like Searail to safely deliver your vehicle.

Transfer fees must be negotiated with the original leaseholder. Most original clients are very motivated to terminate their lease agreement and will often assume other fees to encourage a takeover of their lease agreement. For example, consider the financial incentives currently offered by many clients. If you find a vehicle you would like to buy, discuss your geographical situation with the client and specify who is to assume shipping costs in your offer.

Q: Can I purchase a lease agreement instead of taking it over?

A: Yes. All vehicle lease agreements can be paid up in full before the expiry date. To determine the cost of an existing lease agreement, simply call the original leaseholder and ask him or her to contact the leasing company for the current purchase amount of the lease before taxes. Once you have the final purchase price, you can begin negotiating with the original leaseholder. It is important to remember the following:

In most cases, you will be purchasing the vehicle from the original dealer and not the original leaseholder or the leasing company.

The transaction will be subject to provincial sales tax and the Goods and Services Tax (PST and GST).

The original dealership will also add administrative fees to the final sales price to cover their involvement in the transaction.

If the amount of the lease agreement exceeds the negotiated selling price, the original leaseholder must agree to pay the net difference between the two amounts. For example, if the lease agreement is $30 000 and the accepted selling price of the vehicle is $27 500, the original leaseholder must pay the $2500 plus related taxes to finalize the transaction.

If an agreement-in-principle is reached between the potential buyer and the original leaseholder, it is vital that both parties work together and include the original dealer's representative to help in closing the transaction.

Q: At the end of the lease agreement, am I responsible for damage to or excessive use of the vehicle prior to taking over the lease agreement? How can I protect myself for damages I did not cause?

A: If you follow generally recommended practices, you'll be protected from the start.

Before signing any document taking over a lease, as the new leaseholder you must ensure the vehicle is undamaged. This takes place during the transaction's negotiating phase with the original leaseholder. All lease takeovers should include an independent inspection performed by the original dealership, which will inspect the vehicle mechanically as well as its physical integrity; this includes an inspection of all prior accidents or unmentioned problems. The inspection is your insurance policy. If the vehicle was damaged during an accident but was repaired by an accredited body shop, you should request the original work orders for the repairs. As for maintenance, you should ask the original leaseholder for the maintenance file in order to confirm that the vehicle was properly maintained. For the vehicle's service history, you need only ask the original dealership to print out a billing history of work covered by the warranty. This history will tell you if the vehicle experienced problems under warranty or any other problem.

Q: Once the lease expires, do I have to return the vehicle to the original dealership if I choose not to exercise the purchase option, even if the dealership is on the other side of the country?

A: Each manufacturer's leasing company allows you to return your vehicle to the dealership nearest you. Contact the leasing company 30 days in advance and a customer service representative will provide information on the dealership best suited for you. If you are considering leasing from an independent company, request their end-of-lease protocol before signing the vehicle's lease agreement. You should obtain the independent leasing company's protocol in writing and make sure you fully understand its conditions.

Q: Why do people want to end to their leases prematurely?

A: People's lifestyles and/or financial situations change and that can influence the type, size or requirement for a vehicle.

Q: Why would someone want to take over another person's lease?

A: Sometimes industry standard lease terms such as 36, 48, 60 and 72 months are too long or not flexible enough to meet each individuals needs. Shorter term leases are often desirable, and especially at discounted rates. StopAlease provides consumers with this type of flexibility, helping them find customized lease and price plans that best suit their individual needs.

Q: What happens if I return my vehicle before my lease is up?

A: All lease payments are calculated based on a forecasted residual value at the end of the lease term. This residual value is normally the value that is shown on the lease contract as the Lessee's "option to purchase". If a lease is terminated before the end of its full term than, any shortfall between the premature residual value and the actual market value at the time of termination becomes the responsibility of the original Lessee. In essence, if the Lessee went the full term of the lease the residual value is the risk of the lessor. In an early termination, the penalty to the original Lessee is that the responsibility of the residual value transfers to the Lessee rather than the Lessor. In most cases when a lease is terminated before the end of its full term, the market value of the vehicle is less than the residual specified on the "lease residual schedule". Finding someone to take over your lease can avoid costly residual penalties on behalf of the original Lessee.

Q: Who normally handles a lease transfer?

A: If your vehicle was leased from a car dealership, it would be handled by the business office (F+I) or lease renewal manager. This is definitely your best resource person if you have any questions or require any lease transfer documentation.

Q: Are there fees associated with a lease transfer?

A: Yes, there is usually a lease transfer fee of approximately $500.00 imposed by the leasing company and /or the car dealership for the administrative work involved in the transfer process. This may vary according to the leasing company. One can also expect to pay for a vehicle inspection fee, which should be in the $150.00 range and should include a printout of the vehicle maintenance history. This inspection is highly recommended by StopAlease and is best carried out by the franchised new car dealer. It is your assurance of the quality of the vehicle that you are about to lease. The only other additional fees that will need to be paid will be the cost of licensing the vehicle in the new Lessee's name and shipping if the two parties are in different cities. These should be indicated on the StopAlease "Lease Assumption Agreement".

Q: On completion of a lease transfer is the original Lessee still held liable for the obligations of the new Lessee?

A: This varies according to the policy of each individual leasing company. It is extremely important that you clarify this at time of the lease transfer.

Q: Do I have to be registered as a member of StopAlease to take advantage of its services?

A: If you would like to research lease take over opportunities the answer is no. This is free. If you are interested in listing your vehicle and lease information you must register to become a member at a nominal fee.

Q: What does it cost to become a member of StopAlease?

A: Only if you want to list your vehicle it will cost $79 plus taxes. Remember your listing will remain on StopAlease at no additional cost until your lease is transferred.

Q: What is the role of StopAlease?

A: StopAlease provides a meeting place for interested parties to transfer their leases. We provide valuable step by step information on how to make the process easier.