What Is Vehicle Lease Agreement?
A vehicle lease agreement - also known as a vehicle lease contract - is a form that outlines the terms and conditions of a vehicle lease. It is a contract between the vehicle owner (the lessor) and the client (lessee). The lessee makes a payment for the temporary possession of a vehicle for a predetermined period of time. While being the most widely used for leasing sedans, crossovers, trucks, and motorcycles, these agreements can be used to lease any type of motor vehicle as long as it has a Vehicle Identification Number (VIN) and a license plate.
Lease agreements protect the interests of both parties helping to avoid any misunderstandings or miscommunications that may happen before, after or during the transaction, especially in cases when a lease is negotiated in the absence of a dealership lease form. You can find dozens of car leasing contracts, model agreement templates of commercial, personal and special-purpose vehicle leases by browsing the links below.
How Do Vehicle Lease Agreements Work?
Pre-drafted agreement templates may help you plan out some aspects of the lease that you have yet to consider - like the fee you will have to pay you as the lessee (these include down payments, security deposits, fees required for the registration, etc.), and whether you are paying the retail or the negotiated value of the leased car. Keep in mind, that the interest rate that will constitute a part of the lease. Consider the vehicle's projected value at the end of the lease term before continuing with the agreement. The contract may also include a clause for late fees (payment not done on time) and early termination penalties (penalties resulting from ending the lease before the term is up). The latter can include paying the balance of the remaining lease payments and - in some cases - any additional charges as well.
As a lessee, you are responsible for maintaining an adequate insurance coverage on the leased vehicle and for keeping it in good condition. If the returned car has excessive interior wear, damaged car body (dents, scratches, chipped paint, etc.) or a significant mechanical breakage, the lessor has the right to charge you for the repair. Some dealerships place a limit on the number of miles you can use (normally, a cap is placed on roughly 12, 000 miles per year over the lease term). In case this limit is exceeded, a mileage fee is applied at the end of your lease. When the vehicle lease term is over, you can either return the vehicle to the lessor or purchase the vehicle. Naturally, you lease payments are applied in this case against the total purchase price of the vehicle.