Vehicle lease agreement

This contract can be used to lease a car or other vehicle to a consumer, but it is more likely to be used to rent out unused vehicles to another business. It is also suitable for use where the parties are members of the same group of companies and the lease is designed to redistribute profit where you want it to fall. The document is suitable for all types of vehicle, from motorbike to car and vans to forklifts.
Suitable for use in: England & Wales and Scotland
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About this document

This is a comprehensive and flexible agreement for leasing any vehicle whether new or used. The type of vehicle does not matter. The vehicle could be of any size or type, from a small car to a delivery scooter or can be a van, flatbed lorry or vehicles used for transportation.

The lease period may range from months to years. Despite whatever may be the length of term, this well drawn agreement protects the lender and the vehicle.

Using an agreement such as this one provides both sides with a record of the arrangements and the condition of the vehicle, helping to prevent and more easily resolve disputes.

To make your life easy, we have provided multiple options in many areas including responsibilities for maintenance, payment of the lease, options for buy-out at the end of lease, and options to extend.

By and large, you can set the terms you want, particularly the commercial ones.

The document should be edited so that it reflects exactly how your business works. Our guidance notes will tell you what you can change safely, and what we don't advise changing.

When to use this document

This agreement can be used by any person, business or other organisation to lease to a business or individual.

Examples of use might be:

  • a fleet owner who leases cars, vans to individuals for long trips

  • a business owner who leases his personally owned car to his business

  • a company with an unused delivery van who leases it to another company (perhaps in the same group of companies)

  • holiday car rental

  • a supporter of a charity or not-for-profit organisation who leases their minibus to the organisation

  • Within a group of companies to move profit around the group for any reason

Because this contract is exempt from consumer regulations, we have taken the advantage to include all the commercial provisions you may need.

The law relating to this document

As this agreement is exempt from the Consumer Contracts (ICAC) Regulations 2013, the terms are based on common law that deals with the basics of contracts: offer, acceptance, price and payment, provision of service, liabilities and risk.

However, we have included provisions allowing you to comply with Supply of Goods and Services Act 1982.

This document can not be used as a consumer hire agreement under the Consumer Credit Act 1974.


This agreement is extremely comprehensive. It has been drawn in plain English for maximum flexibility and ease of use.

Key features are:

  • The term of the lease can be as long or short as you like, from months to years. We suggest a short period so that the contract can be renewed and terms (such as the rental amount) updated.

  • Segregation of legal wording from the subject matter.

  • The document allows use of several schedules to record the detail of the agreement. This keeps the "legal" wording of the commercial transaction separate to the "subject matter", creating an agreement that is easier to read, amend and reuse.

  • The document may be used regularly or once only for a particular deal.

  • Flexible rent and payment plans

  • The rent might be a simple monthly or annual payment or may be variable.

  • The buy-back arrangement is an option you can include or delete.

Contents of this agreement

  • Options for lease rentals
  • Full description of the vehicle - subject matter of lease
  • Warranties and exclusion by lessor
  • Testing and checking of vehicle by the lessee and conditions of acceptance
  • Prohibition on selling and subletting
  • Termination or premature termination
  • Optional provision for additional security
  • Option for guarantor
  • Repair and maintenance terms
  • Insurance
  • Buy-out provision
  • Option to extend lease term
  • Lessor’s right to inspect vehicle during lease and many other strong provisions on lessor’s rights
  • Set of lessee’s obligations
  • Lessee to indemnify lessor
  • Other important legal and commercial provisions

Alternatives to this document

Use an equipment lease to lease or to rent any type of office equipment to another business.

It could be used by a director or shareholder lending to his own business, a professional leasing business renting on a commercial basis, a business that wants to make good use of spare equipment, or as a record of within a group of related companies.

It is suitable for any type of equipment, from mobile phones, to computer hardware, to furniture. The document is suitable for both long and short term loans.


This document was written by a solicitor for Net Lawman. It complies with current English law.

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