Vehicle Lease Agreement - Download Free Template
Vehicle Lease Agreement

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This Vehicle Lease Agreement ("Agreement") is made and effective the [DATE],



BETWEEN: [COMPANY NAME] (the "Lessor"), a corporation organized and existing under the laws of [STATE], with its head office located at:





AND: [COMPANY NAME] (the "Lessee"), a corporation organized and existing under the laws of [STATE], with its head office located at:







WHEREAS, the Lessor is the registered owner of the Vehicle.



the lessor is desirous of leasing and the lessee has agreed to lease the said motor vehicle on the terms and conditions contained herein



WHEREAS, this Agreement shall be treated as a true lease for the federal and applicable state income tax purposes with Lessor having all benefits of ownership of the Vehicle.








The Lessor hereby leases to


he Lessee the vehicle described in

Exhibit 1

attached hereto, subject to the conditions and covenants set forth below. The Vehicle shall be used by the Lessee to serve the best interests of the Lessor and the public.


The Vehicle must be maintained and operated in a manner that provides maximum safety and protection to the Lessee's employees and passengers.


The Lessee shall comply with all driver's license requirements as set forth by the Federal and State Governments.





Lesser and Lessee agree on the following:


A down payment of $[SPECIFY] will be made at the beginning of the



This amount will be subtracted from the amount to be amortized over the




A security

deposit of



is due

at the beginning of the transaction and will

be refunded at the end of the term.



The security deposit will not earn interest. The security deposit shall be retained by the Lessor during the term of this Lease as additional security for the performance of the Lessee's obligations under this Lease. The Lessor shall deduct from the security deposit any amount not paid by the Lessee under this Lease and the balance, if any, shall be refunded at the end of this Lease.





The term of this lease shall be for [MONTH/YEARS], commencing on [DAY/MONTH/YEAR] the date that the vehicle(s) are placed in service by the Lessee and continuing until [DAY/MONTH/YEAR], or until this agreement is canceled or terminated in writing by either the Lessor or Lessee, or by mutual consent, with 30 days advance notice.


The maximum term of any lease agreement shall not exceed five (5) years. In the event of breach or noncompliance with this agreement, the Lessor may terminate this agreement by giving the Lessee advance written notice.







The Lessor and Lessee have negotiated and agreed that the initial value of the vehicle is $[



The rental price of the motor vehicle is

$[SPECIFY] payable on the [SPECIFY] day of the MONTH

for the next [SPECIFY]




The lease rate is [SPECIFY] %

per annum



The estimated residual value of the Vehicle is $[SPECIFY].


A late fee of $

[SPECIFY] will be charged on all payments that are paid after the due date.





At all times during the term of this lease, the Lessee shall obtain and maintain, at its own expense, the following minimum insurance coverage through a recognized insurer.


Public liability for bodily injury, death or damage to the property of others in the amount of $1,000,000 per claim, regardless of the number of claims resulting from any one accident



Collision insurance with a maximum deductible of $1,000; and


Comprehensive fire and theft insurance with a maximum deductible of $1,000. If the Lessee does not maintain appropriate insurance coverage, the Lessor has the right, but not the obligation, to do so and the Lessee will owe us this amount.


Insurance coverage must be confirmed annually to the Lessor. The insurance policy must name the Lessor as an additional insured and beneficiary of the loss under the applicable insurance policy.


The policy must also give the Lessor at least ten (10) days notice of any cancellation, termination or reduction in coverage. The Lessee will assign to the Lessor any monies paid under the insurance regardless of who obtained it. The Lessee authorizes the Lessor to receive or collect any monies (including any refund of premiums) payable under the insurance, to complete any proof of loss and any claim, to endorse cheques or drafts for payments and to cancel the insurance or settle or discharge any claim under the insurance. If for any reason the insurance is not fully maintained or coverage is denied, the Lessee will remain liable to us for all amounts due under this lease.


The Lessee shall authorize its insurance provider to provide the Lessor with the details of the insurance policy.


Any repairs over $2,000 must be approved in advance by the Lessor. The lessee agrees to permit the lessor to inspect the vehicle at any reasonable time and place after making such repairs.





The Lessor is the registered owner of the vehicle. All right, title and interest in and to the Vehicle shall remain with the Lessor and nothing in this Agreement shall be deemed to transfer to the Lessee any right of ownership.



lessor obligation



It is agreed that the lessor will make the vehicle available to the lessee during the term of this vehicle lease agreement. The Lessor hereby agrees:


To grant the Lessee exclusive use and possession of the motor vehicle during the duration of this agreement, save as is provided for by the agreement;


To grant the Lessee quiet possession of the motor vehicle;



lessEE obligations


It is agreed that the Lessee shall make use of the Vehicle during the operation of this Vehicle Lease Agreement in accordance with terms of this Vehicle Lease Agreement


The Lessor hereby agrees:




assume all risks of loss and damage related to the vehicle



To ensure that the motor vehicle is used in a proper manner and only driven by persons that bear a valid driving permit;


To ensure that no alterations are made to the motor vehicle or any component removed unless it is immediately replaced by the same component or by one of the same like, make and model or an improved or advanced version;


To report to the nearest Police and inform the Lessor within 48 (forty


eight) hours of any damage to or loss of the motor vehicle;


To be responsible for


normal service, repair, fair wear and tear of the motor vehicle


costs relating to fuel, t


re puncture and oil topping up between services as well as any costs of parking fines and towing expenses for illegal parking;


To ensure that the motor vehicle is only used within [SPECIFY COUNTRY];


To yield the vehicle to the Lessor is good mechanical condition on the expiration of the contract, save for normal wear and tear of the same.



The Lessee undertakes not to sub-lease the Vehicle



The Lessee agrees not to use the Vehicle for any purpose other than [SPECIFY]



The Lessor accepts no obligation for the payment of any tax burden on the Lessee arising for any reason including but not limited to tax on Benefits in Kind.



Routine Maintenance and Operation Expenses


The Lessee assumes the full and sole responsibility for maintaining the Lessor's equipment at a high level of cleanliness, safety, and mechanical soundness. The Lessee agrees to pay all charges for gasoline, oil, parts; services used or supplied for the vehicle during the term of this Lease and shall indemnify the Lessor against all liability on such account. Lessor shall not be required to furnish any services, parts/materials, facilities or personnel to make any repairs to or maintain the vehicle(s); this is clearly and entirely the responsibility of the Lessee.


The Lessee shall have a Preventive Maintenance Program that, at a minimum, meets manufacturer guidelines and recommendations for maintaining vehicles. The Lessee must document and track all vehicle maintenance activities in a Preventive Maintenance Record format. The Lessor may require periodic reports on operation or maintenance activities.


The Lessor, shall have the right to conduct periodic maintenance inspections for the purpose of confirming the existence, condition, and the proper maintenance of the leased equipment.



Resolution of Disputes




Disputes arising in the performance of this agreement which are not resolved through discussions by the parties shall be decided in writing by the authorized representative of the Lessor. This decision shall be final and conclusive unless within ten (10) days from the date of receipt of its copy, the Lessee mails or otherwise furnishes a written appeal to the authorized representative of the Lessor. In connection with any such appeal, the Lessee shall be afforded an opportunity to be heard and to offer evidence in support of its position. The decision of the authorized representative of the Lessor shall be binding upon the Lessee and the Lessee shall abide by the decision.


Performance during Dispute


Unless otherwise directed by the Lessor, the Lessee shall continue performance under this agreement while matters in dispute are being resolved.

Claims for Damages


Any claim resulting from injury or damage to person or property because of any act or omission of the Lessee or of any of his employees, agents or others for whose acts he is legally liable, should be made in writing to the Lessee. The Lessee is responsible for settlement of all such claims.




Unless this agreement provides otherwise, all claims, counterclaims, disputes and other matters in question between the Lessor and the Lessee arising out of or relating to this agreement or its breach will be decided by arbitration if the parties mutually agree, or in a court of competent jurisdiction within the County in which the Lessor is located.


Rights and Remedies


The duties and obligations imposed by this agreement and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. No action or failure to act by the Lessor or Lessee shall constitute a waiver of any right or duty afforded any of them under this agreement, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed in writing.



cancellation or termination


On the failure of the Lessee to perform any obligations stipulated in this agreement, or on default and payment of fees as is provided, or in the event of the Lessee's bankruptcy or insolvency, the Lessor may at its option cancel this lease and on written notice, deliver to the Lessee at the address stated in this agreement, whereupon the Lessee shall surrender to the Lessor possession of the leased equipment.





Any notice to the Lessor shall be sufficiently served if sent by registered post to the first address specified above or directly served on him or on any known agent authorized by him and notified to the Lessee as authorized to receive notices on his behalf.





Neither party to this Agreement shall be liable for failure to perform any of its obligations hereunder if prevented from doing so by reason of force majeure.





This Agreement shall in all respects be governed and construed in accordance with the Laws of [SPECIFY COUNTRY].





Any dispute arising between the Parties shall be determined by a court of competent jurisdiction in [SPECIFY COUNTRY] and may upon agreement between the Parties be submitted for arbitration.



IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.






Authorized Signature Authorized Signature


Print Name Print Name


Title Title


Date Date


Vehicle Registration Number


Brand of Vehicle






Year of Manufacture


Vehicle Identification Number


Fuel Type


Insurance Policy Number