Moving a Leased Car to Another State

A key aspect of an automobile lease agreement is the understanding the car is only to be driven a certain number of miles over the course of the lease term. However, mileage comes into play in another way as well. There are certain procedures you’ll need to observe when moving a leased car to another state too.

Here’s what you need to do.

Inform Your Lessor

Yes, for all intents and purposes it does feel like you own the car. However, much like a rented apartment, you only have the right to occupy it. You don’t have the right to move it to another state altogether. Of course, in the case of an automobile, getting permission to do so is typically much easier.

After all, there’s considerably less effort involved in moving a car.

With that said, some lessors (primarily regional ones) do have prohibitions written into their agreements when it comes to moving the car to another state.

The best way to make sure yours doesn’t is to check your agreement to ensure you don’t run afoul of such a stipulation. You should also make it a point to provide notification several weeks before the planned move. You’ll have more time to pursue a Plan B if the lessor has a problem with moving the car.

This is an important consideration to make when running an internet search using the term “lease a car near me.” While it’s absolutely an OK thing to do, you must be careful to lease from a company that’s cool with a move if you’re anticipating conducting one before the contract runs out.

Inform Your Insurer

Some insurance companies are only licensed to provide coverage for cars registered in certain states. You could inadvertently negate your policy if you move and re-register your car in a state in which your insurer isn’t licensed. Providing advanced notification gives your agent an opportunity to inform you of the consequences of your move.

Moreover, moving from a densely populated state such as California to a sparsely inhabited one such as Montana could mean your insurance rates will decrease. Of course, the opposite is true as well. Either way, it’s important to inform your carrier of the move. Coverage could be denied if your Montana insured car is involved in an incident in your new home state of California and your insurer wasn’t informed of the move.

Inform the DMVs — in Both States

You’ll be required to register the car in your new state of residence. This means new license plates will be issued. You’ll also get a new registration certificate. States require proof of ownership before accepting a new registration, which means your leasing company will have to provide it. The last thing you want is for your company to be blindsided by such a request as it could be construed as suspicious behavior.

Be Prepared to Pay Additional Taxes

Tax laws and registration fees vary from state to state. Further, some states require the entire tax payment to be made upfront, while others are happy receiving it with each monthly payment. You might find yourself in a situation in which you could experience double taxation if you’re moving from a “pay in full upfront” state to a “pay as you go” state. Check the laws of the state into which you’re moving to ensure you can either have the tax you already paid get credited, or get a refund for the amount of usage in the new state will subtract from your previous payment.

As you can see, moving a leased car to another state can be considerably more involved than moving a car you own outright or are purchasing with a car loan. Following the advice above could save you considerable expense.