When an employee leaves their job with a leased car, it seems as though there are plenty of options. Employers and leasing companies usually list four options: the new employer takes over the contract, the employee continues the lease privately, the contract is bought out, or the car is returned and sold. On paper, this sounds like a great deal of freedom of choice. In practice, however, these options often turn out to be accompanied by financial consequences or dependence on others.
The four options for a lease car upon termination of employment
Upon termination of employment of a lease car, the following options are typically offered:
1. Takeover by the new employer
This seems to be the most attractive solution for many employees. However, this option is entirely dependent on the new employer. If the employer already has its own lease scheme or has no need for the car in question, this possibility is immediately forfeited. As a result, the employee often has little influence on this.
2. Taking over the lease contract privately
Another option is to take over the lease contract privately. The employee then pays the monthly lease costs themselves. Although this seems simple on paper, the monthly costs are often tailored to a business situation. For someone who has just changed employers, this can be financially less attractive or even unfeasible.
3. Buying out the lease contract
Buyout is also frequently mentioned as a solution. In this case, the lease contract is terminated prematurely upon payment of a buyout sum. However, for many employees, this represents a significant financial burden, precisely at a time when income insecurity may already be present.
4. Have the car sold
When none of the above options are possible, the leased car is usually returned to the leasing company. The car is then sold. In many cases, a financial settlement follows. This may include termination fees or the difference between the contract value and the final sales proceeds.
Is there really freedom of choice?
Although there are various settlement options for a leased car upon termination of employment, most routes ultimately lead to costs, risks, or dependence on third parties. For many employees, therefore, the choice feels like a false choice. There are multiple possibilities, but none of the options is entirely without financial disadvantage.
Transparency is important
It is understandable that a lease contract has financial consequences upon early termination. After all, leasing companies base their rates on a pre-agreed term. However, communication regarding this could be clearer. Instead of discussing multiple attractive options, it is fairer to provide insight into the potential financial consequences of each choice in advance. This way, employees have a better understanding of where they stand when their employment ends.
Trip registration and mileage registration for a lease car
Do you use a lease car for business purposes? Then accurate mileage tracking remains important, especially when the car is transferred to a new employer or returned. With a complete trip log, it is clear which kilometers were driven for business and private purposes. This prevents disputes regarding the administration and helps ensure correct tax handling.
Do you want to know what the company car costs you net? With our calculation tool, you can calculate your taxable benefit.
