New car long-term leasing

Contract cancellation

• Leasing contract termination
• Car purchase for resale

• Lease transfer or subleasing
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If you wish to terminate your lease, you have various options.

 

Leasing contract termination

• The lessee may terminate a leasing contract at any time during the leasing period by simply returning the car to the merchant.
• In such cases, the lessor may claim damages and interest, representing an amount that is generally rather high.

The lessor may not keep or claim:

• an instalment received when the contract was signed but not due at the time it was terminated. This means that an instalment paid before the leasing period to cover the 24th and last month of the lease may not be kept if only 20 months of the lease have passed;
• the security deposit which is refundable in full when the lease ends;
• storage and insurance costs applying to the waiting period before the car is leased again or sold. These costs are not incurred by the contract's termination since the merchant would have to pay them anyway when the lease is over.

 

Car purchase for resale

If you have the means, the lease allows it and the lessor is willing, you can buy the car leased for the amount remaining on the leasing contract and then sell it. In some cases, certain models may be worth more on the market than the balance remaining on your contract.

 

Lease transfer or subleasing

Transferring the lease to someone else means you are no longer liable for it, unless there is a clause maintaining your liability in case of transfer.

If you sublease, however, you remain liable.

In both cases:

• you need the lessor's consent and must provide the name and address of the person to whom you wish to transfer the lease or sublease the vehicle;
• if the lessor has not advised you, within 15 days of receiving the notice of lease transfer or sublease, that he refuses, he is deemed to have accepted;
• if he refuses, you may contest his decision before the courts. The lessor will have to give his reasons for refusing.

Some lessors use long-term leasing contracts prohibiting transfers or subleasing or charge costs exceeding reasonable expenses linked to transfer or subleasing.

The Office feels that such clauses may be considered unreasonable since they force a consumer no longer wishing the use the car to terminate the leasing contract and pay the resulting damages and interest. In case of disputes concerning such clauses, only the courts can rule on the matter.