It’s the end of your lease, and you want to buy out the car. How do you get a title for a leased car? A leased car is similar to a long-term rental, think of renting a home or office space. At the end of the lease, you can choose to buy out the vehicle from the leasing company or return it.
When you lease a car, the leasing company is the “owner” of the vehicle during the term of the lease. A car lease is an agreement for use of the vehicle between you (the lessee) and the leasing company (the lessor). It’s possible that the leasing company will not hold the title — some leasing companies assign leases to banks or other financial institutions. However, whether it holds the title or assigns it when you lease a car, you’re renting it from someone else, and they’re listed as the owner on the title.
Lease buyout title transfer
When you make the last payment of your lease, you’ll have the option for a lease buyout. This means you can purchase the vehicle from the leasing company after your lease ends instead of returning it. If you select to buy out the vehicle, the leasing company is supposed to gather all of the necessary lease buyout paperwork, odometer statement, bill of sale, and prior title and file it with the state department of motor vehicles. Unfortunately, the lease buyout title transfer process doesn’t always work smoothly.
The problem happens when the leasing company doesn’t give all of the documents, they may only sign over the title and provide a bill of sale. Sometimes the leasing company is located in a different state than where you reside and they don’t have the correct paperwork for your state process. Waiting for new paperwork to arrive can be frustrating since you will want to get your title as quickly as possible so you can start registering your car with your state DMV.
Consider the vehicle titling process to be the same as buying from a private party or third party. For all intents and purposes, the titling office will see it that way. The leasing company is just the third party in the transaction. Because of this, you have to complete the same requirements that you would for a third-party purchase. You may have already paid sales tax on your lease payments, but you may have to pay a portion of sales tax for the value of the vehicle. In many states, an out-of-state title transfer automatically triggers an inspection requirement. Possibly a new registration and new license plates are required – the license plate was likely in the name of the leasing company. Verify with the leasing company exactly what their lease-end buyout procedure is prior to sending off your final payment.
Ask your leasing company if they have the title on hand. Leasing companies often do not retain vehicle titles in their possession; a company can have an electronic title. This results in the leasing company needing to obtain a duplicate title prior to signing it over to you, which then disrupts the title transfer process. Until you have a new title issued in your name, the vehicle still belongs to the leasing company. Type your application for a new title and any other documents that will be sent to the DMV. Your application is more likely to be read quickly by artificial intelligence and accepted without issues.
All in all, a lease buyout title transfer is a great option if you want to keep the vehicle after your lease ends. Make sure that you thoroughly read and understand your lease agreement so you can decide whether it will be a good option for you. We also recommend taking the steps necessary to initiate the process at least two months before your lease expires. Remember, if the title is not in your name, you are not yet the owner of the vehicle.