Vehicle Lease Agreement

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Updated Jul 29, 2023
~ 11 pages
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A vehicle leasing agreement is a legal document that helps clients lease a car for the necessary period of time and pay for leasing seamlessly. After the lease is over, you must decide whether to start a new lease, buy a car, or go carless. Fill out this vehicle lease agreement template on Lawrina, get a complete PDF document, and submit it for your needs.
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Template Description

Paper named "Vehicle Lease Agreement," car, car keys, and a pen

If the new car model is out of your reach, think about leasing it for a specific period. This is where a vehicle lease agreement sample would be quite helpful. It is a contract between lessee and lessor that stipulates details of lease duration, mileage, and monthly payment.   

You can choose a vehicle lease agreement template that has pre-written and properly formatted content. If you’re looking for one, check out this simple vehicle lease agreement template to get instantly started with your new lease tenure. 

What Is a Vehicle Leasing Agreement?

A standard auto lease agreement is a legal contract used by the involved parties while transferring the vehicle possession from the owner to the one leasing the vehicle for a specific time period. Every rental car agreement sample contains the following necessary information:

  • Involved parties

  • Vehicle description

  • Leasing rates

  • Lease duration

  • Insurance and warranty

A typical vehicle lease agreement template applies to any motor vehicle with a VIN (Vehicle Identification Number), such as trucks, cars, motorbikes, recreational vehicles, mopeds, powerboats, motorized scooters, etc. In the case of powerboats, the Hull Identification Number (HIN) is used in the vehicle description section.

Other than a lease agreement for a truck, there are some other common names for this contract, which include:

  • Commercial vehicle lease agreement

  • Private auto lease agreement

  • Van hire agreement

While drafting a printable car lease agreement template, covering all aspects without errors is essential. Therefore, a car lease example template can be the right option to avoid any unwanted legal complications during or at the end of the lease tenure. 

Parties of the Vehicle Lease Agreement

A vehicle lease agreement has two parties, i.e., the lessee and the lessor. Here is a brief description of both:

  • Lessor –– This is the company or person that owns the vehicle. The lessor leases the vehicle to the lessee.
  • Lessee –– The company or person that applies for the car's ownership during the lease tenure. The lessee gets the vehicle after entering the lease agreement with the lessor.

Key Terms

Legal writing can be complicated for those without legal training. So, here's a look at some important terms that you will find in a rent car agreement format. 

  • Monthly Payment –– The agreed amount the lessee must pay to the lessor every month.

  • Lease Term –– Duration of the lease agreement.

  • Residual Value –– Estimated value of the leased vehicle at the end of the lease agreement.

  • Early termination –– The authority of the lessor to end the agreement before the agreed end date; it is subject to non-payment, penalties, and fees.

  • Mileage Allowance –– The number of miles the lessee can drive the vehicle during the lease agreement.

  • Wear and Tear –– The routine wear and tear that the vehicle will undergo during the lease agreement. The lessee will often be responsible for the wear and tear during the lease tenure. 

  • Security Deposit –– Amount paid by the lessee to cover any potential damage and excessive wear and tear to the vehicle during the agreement. 

  • Excess Mileage Fees –– Amount charged to the lessee in the event that they exceed the agreed upon mileage limit.

What Are the Advantages of Leasing a Vehicle?

Leasing a vehicle has many advantages. Here is how it helps:

  • You can use a newer vehicle for a much lower monthly payment.

  • You don't need to worry about depreciating vehicle value because you can return it at the end of the agreement.

  • It lets you drive high-end vehicles that you may not be able to afford otherwise.

Who Must Register the Leased Vehicle?

Registering the leased vehicle is the responsibility of the lessor. That's because the lessor permanently owns the car, unlike the lessee, who has possession of and access to it for a pre-decided duration. 

What Happens When the Vehicle Lease Term Ends?

At the end of automobile lease agreements, the lessee must return the vehicle to the lessor. However, if a provision in the contract allows for the purchase of the vehicle, the lessee has the right to take advantage of that. 

If the lessee wants to buy the vehicle, the payments made during the agreement tenure are counted as part of the purchase payment. Moreover, the lessee may have to pay any penalties that apply at the end of the lease agreement.

Vehicle Description

This section discusses the leased vehicle's specifications and legal and relevant technical information. Usually, it includes:

  • Make;
  • Model;
  • VIN;
  • Year.

Moreover, this section also discusses how the lessee wants to use the vehicle, i.e., for personal, household, or family use. 

Lease Term

This part discusses the start and end date of the copy of a car lease agreement, and there may be additional provisions for early termination too. 

Terms of Payment

Blank printable car rental agreement forms discuss the payment terms, precisely the monthly payment amount, due dates, and penalties for late payments.

Vehicle Usage

Talks about the intended use of vehicles and restrictions related to monthly mileage, geographical limitations, etc.

Vehicle Insurance

In this section, you will find insurance details, minimum liability amount, and other requirements to claim insurance for the vehicle.

Repair and Maintenance Responsibilities

Discusses the lessee's responsibilities to repair and maintain the vehicle for the lease agreement period. 

Default Remedies

This section of the downloadable printable car rental agreement discusses the consequences of default and the lessor's rights in such a situation. If the lessee fails to adhere to the agreement provisions, the lessor has the right to repossess the vehicle and terminate the contract.

How Do I Create a Vehicle Lease Agreement?

To create a trucking lease agreement template for free, you must provide the essential details about your agreement. Here is how you can create your agreement in no time.

  1. Provide the purpose of vehicle use, either personal or business-related.

  2. Mention your state.

  3. Provide the details of the lessor and lessee.

  4. Enter vehicle description, i.e., color, make, model, body type, VIN, etc.

  5. Provide lease details

  6. Provide lease costs and fees. This can include expenses like security deposit, residual value, retail value, etc.

  7. Mention the monthly payments.

  8. Mention whether you want to add an early termination provision to the agreement.

  9. Discuss any warranties

  10. Provide insurance and deductible details.

  11. Provide any additional clauses.

  12. Sign the agreement to complete.

Why Should I Use a Vehicle Lease Agreement?

Even a short rent agreement format in Word protects the lessor and the lessee legally. It enhances communication and reduces any risk of misunderstanding and lack of communication between the parties. 

Common Use Cases

Here are a couple of common use cases for a free car rental agreement form in PDF:

  • Personal Use - A vehicle lease agreement can be a great option when a person wants to use a high-end vehicle for a specific duration without buying the car.

  • Ride-Sharing Service - Ride services like Uber and Lyft use leased cars. It saves them from higher purchase costs and ensures quality and comfortable rides for the passengers.

When Not To Use the Vehicle Lease Agreement

While a lease agreement is pretty helpful in most cases, here are a couple of cases where you're better off not entering into such an agreement:

  • If you are expected to exceed the monthly mileage limit regularly, you will have to pay extra money in penalty.

  • If you don't intend to buy the vehicle after the contract ends, you will be without a vehicle at the end of the lease and won’t have anything to show for your payments., In this case, you might have to rent or lease a new vehicle.

Legal Disclaimer

Please note that Lawrina does not provide any legal services. The information on Lawrina’s Site and its downloadable content, including legal articles and templates, shall not be considered legal advice and is not guaranteed to be correct, complete, and up-to-date. If you require legal advice on your issue, we recommend you contact a qualified attorney licensed in your state. You personally assume full responsibility for any consequences, damages, and costs associated with your use of any content of Lawrina Services available on Lawrina’s Site. 

By using Lawrina’s Site you agree with mentioned above and give your irrevocable consent to comply with and to be bound by the provisions of Lawrina Service terms.

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Frequently Asked Questions

Should you buy or lease a car in the USA?

Leasing a car is a better option for various reasons. For instance, it has a lower monthly payment when compared to purchasing the same car. It's also easier to trade in a leased car, and your car is always under warranty coverage. Moreover, leasing a car can save money on taxes you’d have to pay if you purchased the vehicle. 

Can you lease a used car?

Leasing a used car is possible, and it can reduce the monthly payment for the car. That's because used cars depreciate quicker when compared to new cars. 

Which month is the best to lease a private car?

While it mainly depends on your funds, some stats suggest that July to October is the best time to lease a private car because that's when the new models generally arrive. 

Which type of owners should make car rental contracts?

Personal car owners, rental service companies, small business owners, and car dealerships should make car lease contracts.

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