Leasing contract take over – What do you need to know before transferring the contract?

Date: 24.11.2020
Author: Monica Dona

Preluare leasing - Ce trebuie să știi înainte de a cesiona contractul

The leasing contract is one of the ways often used by legal entities to get new and reliable cars for their activity. However, there are times when, before the end of the contract, the cars must be changed, because they can no longer be used for the original purpose and can not be reassigned within the company.

Under such circumstances, the transfer of the leasing contract and its takeover by another user is one of the options you have to give up the old contract. You can also use this method when you face financial problems and you can no longer pay the installments.

Before transferring the contract, you need to know what it takes to take over the lease from another user and what are the advantages and the disadvantages of such an action.


1. What does leasing mean?

First of all, car leasing is the operation by which one party – called the financier (leasing company) – transfers to the other party – called the user – the right to use a car, for a regular payment (leasing rate). Depending on the type of leasing, financial or operational leasing, at the end of the contract, the user can become the owner of the car or not.

The user who wants his obligations to finish before the end of the contract, will consider to transfer the leasing contract, which, in fact, means that another user will take over his rights and obligations from the contract with the financier.

As a general rule, the assignment and taking over of a leasing agreement is done through a novation (civil legal document based on which an old claim/ obligation is extinguished and another one replaces it). The contract is a tripartite one, concluded between the leasing company, the initial user (the assignor) and the user taking over the leasing (the assignee).

2. What are the conditions for taking over the lease by another person?
2. Care sunt condițiile pentru preluarea leasingului de către o altă persoană

If you are a user and want to transfer the car lease, first of all, you need to find a person who wants to take it over. This can be a natural person or a legal entity.

Increased attention must be paid to the conditions imposed by it for the user, in the sense that the new user will have to meet them in order to be accepted by the financier. The transferee will also be assessed in terms of solvency, an assessment being made so that the leasing company can be sure that they will be able to pay the installments.

Regarding the recovery of the installments already paid, it is good to know that they will not be recovered, but you can think of them as the price for using the car. Instead, an amount could be obtained depending on the price of the novation, which can be negotiated with the transferee. It should be a fair one, taking into account the wear and tear of the car, the remaining lease period and the market level. Otherwise, interest in the takeover may disappear.

If the financier agrees with the transferee, the novation is signed, at which point the rights and obligations of the car lease are assigned to the new user, and those of the transferor are considered extinguished.

From the perspective of the contractor, there are some aspects that must be met, namely:

  • to understand the terms of the leasing contract;
  • to verify that the warranty period is shorter than the leasing period;
  • to conduct a mechanical and aesthetic inspection of the car;
  • to understand the costs of the leasing.

In addition to these , there may be some additional conditions required by the leasing company.

3. Advantages and disadvantages of taking over a leasing contract

As any operation, assigning and taking over a leasing contract has advantages and disadvantages, both for the assignor and for the assignee. Here they are:

For the transferor:

  • Benefits – the obligations under the leasing contract are extinguished, they no longer pas the mandatory installments and mandatory insurance and can obtain credit for a new car;
  • Disadvantages – there may be situations under which, according to the conditions imposed by the financier, he will have to guarantee for the assignee.

For the assignee:

  • Advantages – Can benefit from a variety of reliable cars , relatively new (2-3 years old), at lower prices, and the leasing period will be shorter than in the case of a contract concluded directly with the financier;
  • Disadvantages – whether it’s about cars or vans, they are all run, so there may be problems regarding the technical condition of the car, the number of kilometers or the appearance.

In conclusion, although giving up and taking over a leasing contract requires attention and patience, this operation may be the solution to your problem.

Photo credit: shutterstock.com

4. Frequently asked questions about leasing

What are the reasons why users give up leasing?
The most common reasons why the user gives up leasing they are either because they can no longer pay the installments, or because the cars no longer meet their needs.

Why would anyone take a lease?

Taking over a Leasing contract has many advantages, the most important being the access to a wide variety of relatively new cars at great prices.

What should the lender pay attention to?
The person taking over the lease must pay attention to the technical condition of the car, which is why a mechanical inspection is recommended. Moreover, there are leasing companies that offer this type of service.

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