Here at Nationwide Vehicle Contracts, we are asked many questions by customers regarding their lease contract. One question that is often asked is regarding transferring a lease vehicle to another party, otherwise known as a Transfer of Contract.
A Transfer of Contract can be a confusing process for a customer because they are often dealt with on a case-by-case basis. This makes it difficult to find out how long the process takes, as well as details regarding eligibility. To help make the process easier to understand, we take a look at how a Transfer of Contract works and why you would need it, as well as the criteria, fees and the process involved.
A Transfer of Contract is the movement of one vehicle on Contract Hire or Personal Contract Hire from one customer to another. With a Transfer of Contract, the same parameters of the original agreement still apply (e.g. monthly payments, term and annual mileage remain the same) but both parties must sign a Transfer Modifying Agreement.
There are many reasons why a customer may want to request a Transfer of Contract. Perhaps personal circumstances have changed (such as pregnancy, relocation or redundancy) meaning you want to break from your lease contract early? Or perhaps early termination is simply not appropriate for you? A Transfer of Contract gives you the option to exit the terms of your lease early by transferring it over to someone else who carries on paying the monthly payments. The benefit for the person receiving the car is that they can get an almost new vehicle at a lower cost with no down payment as all the upfront costs have been covered.
A Transfer of Contract is subject to several criteria:
The original lease agreement must be either Contract Hire or Personal Contract Hire.
A Transfer of Contract is only available between private individuals or when a Limited Company wishes to transfer a lease to a private individual or vice versa. If the lease transfer is between a Limited Company to another Limited Company, this is known as a Novation.
No, because this option is not available with all funders. A transfer of contract is at the discretion of the finance provider and does not form any part of the customer terms and conditions or finance agreement.
A Transfer of Contract will also not be provided where:
In the instance that a transfer of contract name is required for a private individual, sole trader, partnership or LLP, Nationwide Vehicle Contracts Ltd will charge a fee of £500 excl. VAT subject to approval by the finance provider. This fee represents two costs:
The transfer of contract fee is payable by debit or credit card or by BACs payment and will be taken on receipt of your signed finance documentation detailing the amendment. Credit card payments will be subject to a 1.95% charge.
It goes without saying that only existing Nationwide Vehicle Contracts customers can apply for a Transfer of Contract with us. If your lease vehicle is with another provider, you must contact them in the first instance to see if you are eligible for a Transfer of Contract.
If you are a customer of Nationwide Vehicle Contracts, follow the below steps to request a Transfer of Contract.
The process involved in a Transfer of Contract can vary case to case as it is often dependent on the funder. We advise that from beginning to end, the process can take up to 4 weeks so please bear this in mind when contacting us.
Please note, you must continue to pay the monthly rentals until the Transfer of Contract is completed and a new start date is given to you.
Have a question regarding a Transfer of Contract? Contact the Nationwide Vehicle Contracts team on 0345 811 9595 (option 3) or leave a comment below.