When planning to move to another state with a leased car, one of the last things you’d probably worry about is whether you actually have the right to move the vehicle to a new state. You automatically assume that you can do it – after all, you’re paying for the right to use the vehicle, right?
It depends. Some lessors will prohibit lessees from moving the leased vehicle to another state permanently. Most lessors, however, will only limit the lessees from taking their leased vehicles out of the country.
So, can you or can’t you take your leased car to another state?
Follow the steps below to learn what you can and can’t do when moving to a different state with a leased car. Also, you’ll get detailed information on how to register a leased car in another state.
Can you move a leased car to another state?
Here’s the thing: some lease agreements will restrict you as a lessee to relocate permanently your leased vehicle to another state. Other lease agreements will not limit you that way but you will still have to fulfill a few obligations prior to the move – see below for more information.
So, here’s what you should do when you’re moving to a new state soon and you have no idea if you can move the leased car to the new state or not.
Step 1. Check your lease agreement
The lease agreement you have signed with the lessor should state clearly whether you can take the leased vehicle out of state. Therefore, you should review your lease agreement and look for the terms and conditions that apply to your specific case.
It’s important to note that each lease agreement is different, so it’s possible that you do not find the information you’re looking for – the information that outlines your right to move your leased car to a different state.
Interestingly enough, you may find the exact paragraph in the vehicle lease agreement that describes the issue of moving across the country with a leased car but you may still fail to understand the text due to the overcomplicated legal jargon or the often perplexing wording of legal documents.
Step 2. Contact the lessor
As mentioned above, each vehicle lease agreement is different, so the best thing you can do is contact your car lessor and inform them that you’re moving to a different state.
If the terms and conditions are clearly outlined in the lease agreement between you and the lessor and they allow the leased car to be moved across the country, then you have nothing to worry about. If not – often the case of imposed limitations for one reason or another, then ask the lessor if the lease agreement can be amended or annexed so that you can take your leased car to a different state without any legal obstacles.
Step 3. Fulfill your obligations as a lessee
Keep in mind that most lease agreements will grant you the right to move of state with a leased car but you must notify duly the lessor of your intentions. This way, the lessor should be willing to help you prepare any additional documents you may need that will enable you to register the leased vehicle in the new state.
Remember that the leasing company is still the owner of the leased car, so they are the title-holders. Also, depending on the state you’re moving to, your lessor may have to issue even more documentation that deals with the state-specific laws, taxes, and fees.
Step 4. Plan for the return of the leased car
If your lease agreement happens to expire soon after your out-of-state move, then check with the leasing company if they have a licensed dealership in the destination state so that in the best-case scenario, you can return the leased car there.
If that’s not an option, then you may have to drive the leased car back to the original state to return it to the lessor or you may have to hire an auto transport company to deliver the car for you.
Bear in mind that while you’re moving to another state permanently, your leased car will have to get back from where it all started, at least in most cases.
Step 5. Be aware of the taxes situation
When you wish to move out of state with a leased car, one thing you should be aware of is that the destination state could tax the car differently.
And here’s the catch: some states collect taxes at the start of a car lease while other states collect those taxes during the lease period.
What that means for you is that if you happen to move from a state that taxes leased cars at the beginning of the lease to a state that taxes leased vehicles during the course of the lease, then you must pay additional taxes on your leased car in the destination state even though you’ve already been taxed in the first state.
The bad news for you is that you normally won’t get a credit for having paid the due taxes in the state you’re moving from.
Read also: Should you drive your car across country or ship it?
How to register a leased car in another state
Once you reach the new state with your leased car, you’ll have to register the vehicle within a specified period of time. Don’t put off this important post-move task because some states give only a period of 10 days for newcomers to register their cars.
To make things easier for you, here are the steps to registering a leased car in a new state:
- Step 1. Ask the leasing company to submit the original car title or a certified copy so that you can be issued a new Certificate of Title in the new state. The lessor should also provide you with limited power of attorney so that you can register the leased car in the destination state.
- Step 2. Gather the necessary documents needed to register your leased car in another state. The best way to do this is to contact the local DMV office in the new state and ask them directly what documents you will need for the registration. In the majority of cases those documents will be:
- Certified copy of the car title certificate;
- Current registration
- Insurance card
- Driver’s license
- Permit by the lessor for registering a car in another state (limited power of attorney)
- Proof of paid tax in the destination state
- Step 3. Update your driver’s license if you’ve just moved to a new state permanently. If that’s the case, then you have to get a new driver’s license from the new state. In some states, you may be required to pass a vision test or take a written exam in order to get issued a new driver’s license.
- Step 4. Purchase insurance for the leased car from the state you just relocated to. Regrettably, even when you have a valid auto insurance policy from your original state, that car insurance won’t be recognized by the DMV in the new state. And if your current car insurance company does not operate in the new state, then you’ll have to find another auto insurer.
- Step 5. Visit in person the nearest DMV office and, armed with all the necessary paperwork, initiate the registration process of the leased car in the new state.
Moving to another state with a leased car can be a bit tricky but it’s nothing too complicated that you won’t be able to handle.
And should you need to have your leased vehicle shipped to the new state by a reputable car shipping company, then use our Moving Cost Calculator and be sure to check that you’re also moving a vehicle so that you get contacted by the top-rated car shippers in your area.
See also: How to ship a car to another state
