Leasing a car is something that requires a contract between the driver and a leasing company. Many dealerships work on behalf of specific manufacturer leasing companies, such as Honda Financial. When you go to a dealership, you will typically sign the leasing papers there and are expected to return the vehicle to that dealership after the agreement has ended.
A car leasing agreement requires many stipulations. It’s important to remember that as the person leasing the vehicle, you do not have any ownership over it. You must follow the rules set forth by the leasing agency. Before we talk about leasing a vehicle for another person, it’s important that you first get a grasp on the usual auto lease agreement stipulations.
Car Leasing Stipulations
Auto Insurance – You are required to purchase your own auto insurance policy that has the minimum standards set out in the lease agreement. The leasing company is the one who owns the car and therefore loses financially if the vehicle were to be wrecked without insurance. For this reason, part of the agreement states that you must pay for insurance coverage to protect their financial investment.
Maximum Annual Mileage Limits – As part of your lease agreement, you agree to not exceed the maximum amount of annual mileage on the vehicle. Since lease agreements are based on the value of the car, having a lessee put an excessive amount of mileage on a new car can drastically reduce its value way under what the lessee paid during leasing term. Typically at the time of signing, you will be offered an over mileage option which will increase your maximum annual mileage limit at an additional cost.
No Excess Wear And Tear – Again, with a leased vehicle you do not own it, the leasing company does. While they allow you to drive the vehicle during the set period of your agreement, you agree to not damage the vehicle more than the average amount of wear and tear a vehicle gets over the length of the term. Any excessive damages to the vehicle will greatly reduce its value and will result in you getting charged for the damages.
Leasing For Somebody Else
Now that you are aware of the common stipulations that come along with auto leasing agreements, you will now be able to better understand the process of leasing a vehicle for another person.
When you lease a vehicle, the lease is put in your name. This means that you are solely responsible for the vehicle. Any damages that happen to the vehicle, any excessive mileage put on it, and any lapse in returning the car on time all fall on you. Before you decide to lease a vehicle for someone else to drive you should take all these things into account.
The leasing agreement is between you and the finance company. They are holding you legally responsible, not the person you got the lease for. You should consider if the person you are getting the lease for is worth putting yourself at risk.
Many leasing agreements typically cover the lessee and their spouse. If you want to lease the vehicle for someone else to drive, you must ask the leasing agent. Most leasing companies will allow for other drivers on the policy as long as you have insurance that includes the other driver as well. This agreement for more drivers must be hashed out at the time of signing.
You must get auto insurance for the vehicle that covers you and anyone else that will be driving the vehicle. If you are leasing the vehicle for someone else to solely drive, it’s still very likely the insurance company will require you to be on the insurance plan with the other person.