Do you drive a car under a leasing contract ? Would you like to sell the leased car before the end of the contract or replace it ? We explain how to sell a leased car.
In Switzerland, car leasing with residual value is becoming increasingly popular. This popularity is based on a number of advantages, such as the possibility of always driving a new or recent vehicle. When motorists consider terminating their leasing contract, the steps involved can seem complex. LeaseTransfer makes selling a leased car quick and easy. Let’s get started.
How to sell a leased car ?
At first glance, selling a leased car is something that any driver who has signed a lease agreement with residual value can do. In practical terms, selling a lease allows the driver (individual, sole proprietorship, company, etc.) to terminate the vehicle lease agreement by buying out the lease.
Whether by choice or necessity, the lessee of the vehicle who wishes to part with it or change it has the option of selling their car lease. In this context, there are three solutions available for terminating or selling a leased car:
- Early return of the vehicle: In this case, the lessee returns the leased car to the supplier garage before the end of the contract. Under the car lease agreement, early return of the vehicle requires the lessee to pay substantial penalties, which can amount to several thousand or even tens of thousands of francs in some cases. It is important to note that this solution is clearly the least financially advantageous. In principle, the lessee is required to pay additional costs when returning the leased car if there is proven damage to the vehicle or if the allocated mileage has been exceeded.
- Lease transfer: This solution allows the driver to transfer their lease to a new lessee. In this way, the lease agreement is maintained for the remainder of the lease term. In a sense, this type of lease transfer allows the current holder to part with the leased car and simultaneously detach themselves from the associated contract.
- Lease buyback with residual value: This financial transaction involves selling your lease agreement to a private or professional customer. To find out how much your car lease is worth, simply contact the leasing finance company and ask them for the balance of the agreement when you want to sell your leased car. The leasing company will issue you with a non-binding invoice. If you sell your leased car, you will have to pay the invoice for the balance of your leasing contract so that code 178 “change of owner prohibited” can be removed from the vehicle registration document by the finance company as soon as payment of the invoice allowing the leasing buyback has been recorded. However, if the sale of your leased car does not go ahead, the invoice for the balance of the lease will be automatically canceled and you will have to continue paying your monthly lease payments.
GOOD TO KNOW: Depending on the reason for terminating the lease agreement, the driver’s personal situation (transfer or sale of a company, cessation of business activity, difficulty paying lease payments following job loss, etc.) plays a key role in choosing the solution that best suits their plans for selling a leased car.
What are the different types of lease buyouts and how do they work ?
Would you like to opt for a lease buyout during your contract? There are many ways to do this. To give you a clear idea, here are the three types of lease buyouts and how they work:
1- Lease buyout by the lessee
- When a lessee repurchases a lease, they can do so on a personal basis. To do this, the lessee must request an invoice for the balance of their lease agreement at the time they wish to repurchase the lease by contacting the company that financed the lease and the garage that supplied the vehicle.
2- The repurchase of the lease by a third party
- In addition to transferring the lease agreement to a third party, it is also possible to have your lease bought out by a third party (private or professional). However, it can be difficult to find a buyer for your lease. That’s why LeaseTransfer, with its 100% accompanied formula, makes this process easier for you by offering your used car for lease to more than a hundred partners throughout Switzerland who are interested in buying your lease contract.
3- Lease buyout by a car dealer
- In some cases, the vehicle lessee can have their lease agreement bought out by a car dealer, particularly if they wish to lease a new car. Some professionals in the automotive sector may be willing to buy back your lease agreement if you are leasing a new vehicle. In this case, the professional will pay the balance of your lease agreement directly to the legal owner of the vehicle, the leasing finance company. However, unless you are leasing a new car, few professionals will offer to buy back your lease.
Lease transfer to a third party: What supporting documents must be provided ?
When the lessee manages to find someone to take over their lease, the first step in the lease transfer to a third party is to fulfill the essential conditions for signing a car lease agreement:
- Have been a Swiss tax resident for at least 6 months (domicile for individuals or registered office for companies)
- Be a Swiss citizen or have residence in Switzerland with a B or C residence permit valid until the end of the lease contract to be taken over.
- Prove that you have sufficient financial means to pay the monthly lease payments. If your assets or income are sufficient but have not been for long enough, for example if you have recently moved to Switzerland or started a new job, you may be asked to make an initial down payment when taking over the lease.
The second step in taking over an existing lease agreement is the obligation of the vehicle owner who established the lease agreement to ensure the solvency of the person taking over the car lease.
As with entering into a lease on a new or used vehicle, the documents required for taking over a car lease are as follows:
For private individuals:
- A valid form of identification (ID card or passport)
- A copy of your C or B residence permit
- A copy of your last 3 pay slips for employees (please note that you may be asked to provide a copy of your employment contract)
For freelancers or companies:
- An extract from the lessee’s commercial register
- A copy of the identity documents of the persons authorized to sign on behalf of the lessee
- A copy of the ID of the person who is jointly and severally liable
Please note that you may be asked to provide a copy of your latest tax assessment notice and an extract from the debt collection register.
From the leasing finance company’s point of view, the purpose of analyzing the supporting documents is to ensure the buyer’s solvency. Based on the information provided, the owner of the leased used car can assess, in particular, the buyer’s ability to repay the lease agreement.
Selling a leased car: What you need to know
- The lessee of a vehicle can sell their leased car in several ways: through a third party, a car dealership, or on their own.
- Depending on your personal plans, it may be more advantageous to consult a professional in car leasing sales in Switzerland, such as LeaseTransfer.
- If you return the car before the end of the lease, it is important to ensure that it is in perfect condition. At the end of the car lease agreement, this preliminary check will ensure that you avoid any unpleasant surprises, such as additional charges billed by the vehicle supplier.
Ultimately, you now know how to sell a leased car. Have you decided to sell your leased vehicle? The 100% digital platform www.leasetransfer.ch offers you a solution tailored to your situation to get out of your lease agreement before the end of the lease under the best possible financial conditions. What’s more, it’s simple, fast, and above all, inexpensive!
