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Interprovincial Lease Transfers
Transferring a Lease from one Province to another Province

Over the past several years, many Leasebusters customers have transferred vehicles from one province to another province; most of the transactions were completed without any issues or challenges, others were somewhat troublesome. In response to requests from many of our customers, Leasebusters has devoted a section of our website to providing an overview of the interprovincial transfer process. The following are the Leasebusters group’s recommendations and suggestions regarding this type of vehicle lease transfer.

The Lease-Take-Over (LTO) Process

The LTO process is exactly the same as outlined in the Leasebusters process checklist:

The only difference is the inability for the Buyer and Seller to meet personally and engage in the formal presentation of the subject LTO vehicle (including road test).

Once a deal in principle has been made between the Buyer and Seller (and the supplied “Offer to Lease” has been completed and executed between the two parties) the following interprovincial process begins:

  • The Buyer submits a completed and executed credit application to the original selling dealership (or directly to the leasing company depending on the leasing company’s credit application acceptance policy). The Seller will provide the Buyer with the appropriate contact information of the dealership or the leasing company. This information should be noted on the Offer-to-Lease.

  • Once the credit application has been approved, the Seller should take several (actual) photos of the vehicle. Take different and more in-depth photos if there were actual photos posted on the Seller's Details Page. The Seller should email these photos to the Buyer for review.

  • The Seller makes an appointment with the original selling dealership (or servicing dealership) for a physical and mechanical inspection. The Seller provides the Buyer with the dealership name and the contact person(s) at the dealership.

  • The Buyer will coordinate with the service department contact in order for that person to be "the eyes of the Buyer" and subsequently inspect the physical integrity of the vehicle.

  • The Buyer should also have a member of the sales department (introduced by the Seller) "check-off" all the features and options located on a printed page of the listing’s Details Page. Performing this task confirms that all the features and options depicted on the Details Page actually exist.

  • By this point in time; the Buyer should be convinced that the vehicle's integrity is very much intact; but there is more. When a vehicle is shipped by a reputable shipping company; the shipping company always performs a condition report in order to note any imperfections on the vehicle (and to hold them harmless for any imperfections that existed prior to the shipping process).


Lease-Take-Over Negotiations (Buyer & Seller)

The only area of price negotiations that are available to the Buyer on a lease-take-over is the cash component; no part or parameter of the original vehicle lease can be altered or negotiated.

It is imperative that the Buyer and Seller discuss, negotiate, agree upon and document the following cash components of the interprovincial lease-take-over deal in principle.

  • Which party is paying for and retaining the shipping company (the amount should be noted on the offer to lease).

  • The cash incentive or down payment amount (and how the funds are going to be disbursed)

  • Which party is paying for the lease transfer fee

  • Which party is paying for the vehicle inspection

The full disclosure and transparency of the cash component of the lease-take-over transaction is the most important aspect of the process. When both parties understand and agree upon the cash amounts, very little can or will impair the balance of the lease-take-over process.


Cash Incentives, Lease Transfer Fees and Disbursements

All lease-take-overs contain some type of cash and fee component. The Buyer and Seller must always note their cash incentive and fee responsibilities on the Offer-to-Lease in order to avoid any confusion as the transaction comes closer to completion. Lease-take-overs often have a cash incentive as part of the deal and the disbursement of this incentive (depending on the amount of the incentive) can be tricky when the Buyer and Seller are not present during the signing of the lease transfer contract. Leasebusters recommends:

  • If the cash incentive is over $2,000.00, the Buyer should retain their lawyer or a notary public to "hold" the cash incentive until both parties are mutually satisfied with the completion of the lease transfer.

  • The Seller would courier the cash incentive Bank Draft to the law firm making the cheque payable to the firm "in trust".

  • If the cash incentive is under $2,000.00; the Seller couriers the bank draft to the Buyer upon receipt of the returned (signed) lease transfer contracts. The Buyer will receive the cash incentive monies prior to the arrival of the vehicle in the majority of cases.

Interprovincial transfers require the Buyer, the Seller and usually a dealership to gain a considerable amount of rapport throughout the process. In most cases, cash incentives and disbursements are handled responsibly and in good faith. The Buyer and the Seller should take thorough notes throughout the process in the event that a conflict or issue arises.


The Administrative Process

  • The lease transfer agreements are produced by the leasing company and are usually sent to either the original selling dealership or the original lessee (the Seller).

  • The Seller would sign the appropriate area(s) and courier the package to the Buyer.

  • The Buyer would sign the appropriate area(s) and courier the package back the Seller. The Buyer would courier back all the original (signed) documents and make a photocopy of all the documents for their records. The Buyer would also include all requested documents such as a photocopy of their driver's license, copy of an insurance slip, a void cheque etc in the return courier package.

  • At this point; all the documents should have been properly executed and all the original copies are with the original lessee (the Seller). The only document that might not be included in the package is the vehicle registration/ownership. See section entitled “Licensing & Registration” for clarification on this process.

  • The Seller is now poised to ship the vehicle to the Buyer. See section entitled "Vehicle Shipping" for more details on this process.


Licensing & Registration

This process is often difficult and confusing due to the policies and procedures that must be adhered to at the local vehicle licensing office. It is apparent that many licensing offices have different interpretations of the vehicle licensing legislations imposed by the province; therefore, nothing should be assumed or taken for granted with respect to the registration of a leased vehicle from a different province.

Helpful Note 1: During the vehicle inspection or credit approval phase of the lease-take-over process; call or visit your local license office and ask one of their customer service representatives what documentation you will need to gather in order to convert the ownership from a different province and to purchase license plates for that vehicle.

Helpful Note 2: The "owner" of the vehicle will not change; only the lessee of record will change. For example, if you are taking-over a GMAC lease from another province , the vehicle will still be in GMAC's name after the completion of the transfer.

The licensing documentation requirement will vary from province to province, however it is certain that the Seller must send the Buyer the following documents:.

  • The original ownership of the vehicle from the originating province – a photocopy of the ownership will not be sufficient. The leasing company, the original selling dealership or the Seller's local licensing office will be able to provide this original document to the Seller.

  • A vehicle licensing Power of Attorney from the leasing company – this document is included in all lease transfer package and it is imperative for any licensing requests to be processed.

  • Many licensing offices require a photocopy of the lease-transfer contract – make sure you have sufficient copies.

Helpful Note 3: When transferring pickup trucks, cargo vans and any other trucks that can be deemed as "commercial"; find out if your local license office requires a weight slip.

Helpful Note 4: The Buyer should request that the Seller purchases a "Temporary Trip Permit" from their local licensing office prior to shipping the vehicle to the Buyer. A "Temporary Trip Permit" will allow the Buyer to drive the vehicle upon its arrival in the new province prior to the acquisition of the actual license plates.


Vehicle Shipping

Most interprovincial lease transfers will require some type of formal shipping. Leasebusters have used (and promoted) the services of Searail. Searail specializes in vehicle shipping across Canada and have been successfully used by Leasebusters customers for over 5 years.

As mentioned; every vehicle that is shipped (by Searail and other reputable shippers) is subject to a vehicle inspection. The inspection is designed to protect the shipping company from being responsible for any pre-existing physical damage and to provide the receiver (the Buyer) with a final condition report of the vehicle. It is the Seller’s responsibility to sign-off on the condition report prior to allowing the shipping company to take the vehicle away; upon receipt of the condition report, the Seller should immediately email or fax it to the Buyer for their review.

The Buyer and the Seller must mutually decide on the shipping company that is going to be retained and (equally important) they must decide on which party is going to be financially responsible for the shipping fees (or if it is going to be equally divided amongst both parties).

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