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What are your rights when transferring a lease?
To put things into context, let's define what a lease transfer is. A lease transfer is the early termination of a contract, whether your lease is in force or not. LOA (lease with purchase option) or in LLD (long-term rental). It is therefore entirely possible for you as an individual to terminate your contract early. This is a more advantageous way of being released from your commitment before the end of your contract.
The transfer of leasingThis consists of transferring your leasing contract to a new buyer, who will be committed to your vehicle as it stands for the remaining term of your contract. The buyer undertakes to take over the same amount with monthly instalments already agreed with the financing organisation.
Breaking a long-term hire contract: is it complicated?
Make no mistake, both types of contract,Full service leasing is the easiest contract to terminate.As mentioned above, the lessee may break the contract of any kind. Let's start with long-term leasing. This varies from 1 to 5 years. However, it is not without its drawbacks.
Despite certain beliefs, it is not uncommon for tenants not to bring their contract to an end. The reasons for this are generally fairly common, such as a withdrawal of licence or a breach of employment contract. However, tenants may also have to terminate their long-term rental contract for completely different reasons. These may include personal (bank credit to pay, marriage, moving house, road accident), professionals (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 specialist companies such as "transfertleasing.fr", which put people interested in taking over a leasing contract 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 strongly recommend that you terminate your contract as soon as possible. That way you won't have to pay penalties on top of the monthly instalments you owe your lessor, and you could find yourself in a very tricky situation!
It should be noted that this termination can be carried out by the rental company directly without the tenant's notice. 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 claim compensation from the lessee and, logically, the return of the vehicle(s) in question.
What about the LOA contract? We explain everything
A lease with a purchase option is quite different from a long-term contract. Popular with lessees, it is often chosen for the following reasons these advantages, not least the possibility of buying the vehicle at the end of the contractin question. The second key advantage is the the option of starting a new lease at the end of the term with a different car. A good compromise, then, if you want to change your electric vehicle .
Cancellation options for this categoryHowever, this type of contract is particularly costly for the tenant. They are sometimes not very advantageous financially, depending on the tenant's situation. There are 4 ways of freeing yourself from your current contract:
- Return the vehicle to the financing organisation This solution is the most expensive of all. You will have to pay all the remaining monthly instalments. As a result, you will have to pay monthly instalments without yet being able to use the vehicle, as 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. Because of the law of supply and demand and the popularity of the model throughout its life, the first two years depreciate the value of the vehicle considerably. A very popular vehicle like the Peugeot e-208will therefore depreciate less than other equivalent cars that are less popular. But in general, this solution is not really optimal or attractive, because the purchase option will always be higher than the second-hand market price.
- Selling the vehicle after exercising the purchase option: as mentioned above, you can exercise the purchase option and buy the vehicle from 100% and sell 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.
In conclusion
As you can see, the simplest solution at the moment is to think carefully before committing to a lease. It's not a trivial choice, because as we saw in the article, both contracts are full of conditions and benefits that most people are unaware of. Bear in mind that, although restrictive, the termination of the two contracts will necessarily have financial consequences for you. You have all the keys you need to keep them to a minimum. Weso we can only advise you not to rush too quickly when you decide to opt for a long-term leasing or leasing with a purchase optionso that you are aware of your rights and duties.
For more information, we've put together a guide to this topic to explore the different aspects in depth:
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