What is Vehicle Lease Agreement Drafting?
A vehicle lease agreement is a legal contract between a company or dealer leasing a vehicle to a user or lessee. Its purpose is to enable the user to drive the vehicle for a period of time, for which the vehicle lessor will be compensated. Ownership of the vehicle isn’t transferred under this arrangement.
If you need to draft a vehicle lease agreement, you’ll want to ensure it’s clear and protects both parties’ interests, while minimizing your risk of conflict.
Read the rest of this article to explore what key terms to include in a vehicle lease agreement, how to draft it for clarity, and how a qualified lawyer can assist you with the process to give you peace of mind.
What are Key Terms to Include in a Vehicle Lease Agreement?
A vehicle lease agreement should contain the following essential terms and clauses:
- Parties. This identifies the parties involved in the agreement: the lessee (the person leasing the vehicle) and lessor (the dealership or manufacturer issuing the lease).
- Amount due. This can include a down payment or any fees that are included.
- Monthly payments. The agreement should outline how much money you’ll have to pay per month for using the car.
- Capitalized cost. This specifies the negotiated retail price of the vehicle being leased. When it’s lower, it reduces the required monthly payments.
- Acquisition fee. This is what leasing companies charge to arrange the vehicle lease.
- Buyout price. There could be a buyout price included, which specifies how much you can buy the vehicle for after the lease comes to an end.
- Termination. If you want to exit the lease agreement earlier than expected, you might have to pay a fee.
- Usage. This clause determines how many miles you’re allowed to drive and you’ll be charged an amount for overuse.
- Term. This specifies how long the lease agreement is effective, which is usually 24 to 60 months.
What are Tips for Drafting a Vehicle Lease Agreement?
A vehicle lease agreement must be clear and detailed to protect both parties’ interests. Here are some of the most important things to explain in the agreement and some tips to follow during the contract drafting process.
Define Both Parties’ Obligations
There must be clarity about what roles both parties have under the vehicle lease agreement. For example, the lessee agrees to make scheduled payments on time, while the lessor provides and reclaims the vehicle at the end of the term.
Clarify Payment Details
Your vehicle lease agreement must provide specific details, such as the rental date, when payments are due (such as monthly), and payment methods. There should also be clarity about penalties for late payments.
Describe the Vehicle
The car’s details must be provided, which include the model, year, make, vehicle identification number, and registration. Outline the pre-rental condition of the car so that any damage is recorded to prevent future disputes over the car’s condition.
Include Return Conditions
To prevent conflict, the vehicle lease agreement should include how the vehicle’s condition is expected to be upon its return. For example, it might need to have a certain fuel level, be clean, and be returned with its original keys and documents.
Prohibit Certain Usage
To prevent misunderstandings or unauthorized uses, the person using the car should have clarity about what activities are prohibited, such as letting an unauthorized driver use the car or driving off road.
Explain Insurance
You want to have a clear clause about insurance so that parties aren’t at risk of exposure if something happens, such as an accident. The vehicle lease agreement should clearly state which party must take out insurance and how claims can be made.
How Does a Lawyer Help You Draft a Vehicle Lease Agreement?
If you want to work with a lawyer to draft a clear and specific vehicle lease agreement, this can be beneficial in various ways. A lawyer will:
- Explain the lease purpose so that you can customize the lease agreement according to your requirements.
- Clearly define vehicle lease responsibilities, such as regarding repairs, fuel costs, and servicing.
- Protect both parties’ interests, such as by including inspection rights, excess mileage charges, and/or early termination rights.
- Draft clear clauses that both parties understand so that there’s no confusion which could result in disputes.
- Align the vehicle lease agreement with all relevant laws, such as privacy and consumer protection laws.
- Consider any future legal or financial risks so that they can include provisions to reduce the risk of disputes.
Where to Find a Lawyer for Vehicle Lease Agreement Drafting
If you need to draft a vehicle lease agreement, it’s in your best interest to hire a qualified lawyer for assistance. But, where do you find one? Luckily, online legal platforms make it easy to find the right lawyer.
ContractsCounsel is one of the biggest online legal marketplaces that gives you access to a network of vetted lawyers in your location. You can easily ask one of the lawyers on the platform to draft your vehicle lease agreement by following these steps:
- Go to the ContractsCounsel marketplace.
- Post your project for free. Include a few details to help you find the most suitable lawyer.
- Wait for lawyer bids. You’ll receive multiple bids from lawyers directly on the platform who have the experience to help you.
- Review the lawyers’ profiles. The platform provides lawyer data to help you choose the right one, such as their location, client ratings for previous projects, expertise, and credentials.
- Connect with a lawyer you think is best suited to your requirements and hire them to draft your vehicle lease agreement for a flat fee.
