Leasing a Car and Moving to Another State: What to Know and What to Do

Leasing a car is a great option for people who need a car but don’t want to commit to car ownership or don’t have enough money to buy the type of car they would like. It’s convenient, hassle-free, and light on the budget – and it allows you to always drive the latest model of your preferred brand!

If you need to move out of state, however, things become a bit complicated – you don’t own your leased vehicle, but you’re paying for the right to use it. So, can you take it with you then? Can you move a leased car to another state?

In most cases, you will be able to take your leased car to your new state – you’ll just need to ensure the vehicle is properly registered and titled there. Depending on your lease agreement, however, you may be prohibited from moving your leased car out of state permanently.

You need to confirm whether you have the right to relocate your leased vehicle to another state or not – and if you do, you need to find out what to do when moving states with a leased car.

Here is everything you need to know when leasing a car and moving to another state:

Can you move out of state with a leased car?

First things first – before you start making any plans or preparations, you need a definite answer to the question “Can I move out of state with a leased car?”

The easiest way to find that answer is to check your lease agreement – it should state whether you can relocate the leased vehicle out of state or not.

So, read the agreement you have signed with the lessor very carefully and look for a clause that allows or prohibits moving out of state with the leased car:

• If you have the right to take the leased vehicle to another state, you need to find out under what terms and conditions you can do so and what obligations you have;
• In case the lease agreement restricts you from permanently moving the car out of state, you may have no choice but to break the lease – unless it can be amended to meet your needs;
• If it is not mentioned in the lease whether you can move out of state with the leased vehicle, or if the relevant clause is unclear and difficult to understand, you will have to request a definitive answer from the lessor.

Either way, your next step is to call the lessor, let them know you’re moving to a different state, and discuss your options with them:

• Clarify whether you can take your leased car out of state or not;
• Even if the terms and conditions for moving to another state with a leased car are clearly outlined in the lease agreement, confirm your rights and responsibilities with the lessor;
• If the lease says that you cannot relocate the leased vehicle out of state permanently, ask the lessor if the agreement can be amended or annexed so that you can take your leased car to your new state without any legal obstacles.

Now that you know for sure whether you can move to a different state with your leased car, you can plan your course of action.

What to do if you can’t move your leased car to another state

If you’re not allowed to move out of state with your leased car, you will most probably need to break the lease and return the vehicle to the lessor.

Keep in mind that this can cost you a pretty penny – you will most likely have to pay the balance due, as well as any fees and penalties associated with early termination. It could easily be thousands of dollars, depending on your lease terms and how early you’re ending the agreement.

If your lease permits it, you may have the option to sublease the car – it may not be easy to find someone to take over your lease and you will still be charged a transfer fee but it will be much smaller than the early termination fee.

Tips for moving out of state with a leased car

Most lease agreements grant the right to move the leased vehicle to another state, so you will most probably be able to take your car with you when you move. You will, however, need to take several steps to ensure that all your obligations as a lessee are fulfilled and the vehicle is duly titled and registered in the new state.

Step 1. Notify the lessor of your move and ask them to prepare the necessary paperwork

When planning to move out of state with a leased car, you need to notify the leasing company of your intentions well in advance, so there is enough time to make all the necessary preparations and ensure a smooth transition.

Find out exactly what your responsibilities are and be sure to fulfill them in a timely and conscientious manner.

Ask the lessor to prepare the necessary documents for registering the leased car in your new state (it is a good idea to contact the local DMV office in your new area beforehand to find out exactly what documents you’re going to need to retitle and register the vehicle).

The leasing company is the legal owner of the leased car, so they hold the title to the vehicle. As title-holders, they need to submit the original title or a certified copy to the local titling authority in your new area, so the car can be retitled in the new state. Keep in mind that you will be responsible for paying any fees associated with retitling the car – and may even have to pay for titling the vehicle back to your old state when you return the car to the lessor.

You will need authorization from the leasing company to register your leased vehicle in your new state, so they should provide you with a limited power of attorney for the purpose.

Step 2. Check for tax obligations in your new state

When moving to another state with a leased car, you need to be aware of possible tax implications.

Your new state may tax the leased car differently than your old one. Besides, some states charge tax at the beginning of the lease, while others collect taxes during the entire lease period – so, if you happen to move from a state that taxes leased cars at the start of the lease to a state that collects taxes during the course of the lease, you will have to pay additional taxes for your leased vehicle in your new state even though you’ve already been taxed in your old state.

Depending on the state you’re moving to, you may or may not get a credit for having paid the due tax at the beginning of the lease in the state you’re moving from.

It is, therefore, very important to research the tax laws in your future state before the move and plan for any additional taxes you may have to pay.  

Step 3. Find out how you can return the car when the lease ends

Even if you can take your car with you when moving to another state, when the lease ends, you will have to return the vehicle to the lessor.

Most leases say that you must return the car to the location where you leased it. It is, however, possible that your leasing company have a licensed dealership in your new state or in another state that is closer to your new home than the state you moved from. If so, you may be able to return your leased car to that dealership and save yourself the trouble of taking the vehicle back to your old state.

You’re, therefore, advised to discuss the matter with the lessor in advance, and, if possible, make an arrangement to return the car to a closer location.

In case you have no other option but to return your leased car to the location where you leased it, you’ll need to either drive the car back to your old state (and fly back home) or hire a professional car shipping company to return the leased vehicle for you.

Step 4. Decide whether to drive your leased car or ship it to your new home

Last but not least, you need to decide whether to drive your leased car to your new home or have it shipped with a car transport company.

Both options have their pros and cons:

• Driving the leased car will save you money – you won’t need to pay for professional car shipping services, will be able to transport your entire family – and any pets you have – in the car (so, you’ll save on plane tickets and won’t need to worry about how to get your animal friends to your new home), and will even be able to take some of your items with you (which will help you reduce your moving costs). Yet, you will have to be on the road for a long time (especially if you’re moving to a faraway state) and will need to pay for fuel, as well as for meals and lodgings along the way;
• Shipping your car will be harder on your budget, but if you’re pressed for time or the weather conditions are not favorable, driving across the country won’t be an option. (Related: How to ship a car to another state)

See also: Ship a car or drive it when moving across country

Having found the answer to the question “Can you move to another state with a leased car?” and made all the necessary plans and preparations, you’re ready to head to your new home – together with your leased car.

How to register a leased car in another state

When you move to your new state with your leased vehicle, you’ll need to take care of a couple more things to ensure that you can drive the car in your new area without any legal issues.

First, you need to make sure the car is properly titled and registered in the new state (most states require cars – even leased ones – to be retitled after a move; all states require re-registration).

You’ll have a limited amount of time to complete this task (usually up to 30 days after the move, but the time frame may be as little as 10 days in some states), so it should be near the top of the list of urgent post-relocation tasks to take care of after moving to a new state.

In order for your leased car to be retitled, the leasing company will have to forward the original Certificate of title to the local titling authority in your new state (as explained above). When all the paperwork is completed, you will receive a new Certificate of title.

In order to register your leased car, you need to go to the local DMV. Contact them beforehand to find out what exactly their requirements are and make sure you bring all the necessary documents with you. The procedure may be slightly different in different states, but, generally, you’re going to need:

• A certified copy of the car title certificate
• Current car registration
• Driver’s license
• An authorization from the leasing company to register the vehicle in the new state (the limited power of attorney the lessor provided you with)
• Insurance ID card
• Proof you’ve paid all the due taxes in the new state

Depending on the state, you may need to update your car insurance policy and the car may have to pass a state emissions test before you can register the vehicle.

Good to know: If your current car insurance company operates in your new state, you can stay with them after the move – your insurance policy, however, will still need to be updated as the premiums you have to pay may be different (because of the differences in state insurance rates).

If your current insurance provider doesn’t do business in your new area, you’ll need to find a new auto insurer and purchase appropriate insurance for your leased vehicle before you can register it in the state.

When you update your car registration, you’ll receive new license plates and documentation showing you have the right to drive the vehicle in the state (the car has passed any necessary inspections, you’ve paid all due taxes, and all the required paperwork is in order).

You may be required to return your old license plates before getting new ones.

You will also need to update your driver’s license in order to be able to drive your car – leased or not – in the new state. Most states have a deadline of 30 days for updating driver’s license after moving and it can’t be done online (you need to visit the local DMV office in person, fill in an application form, present the necessary documents, pass the required tests, and pay the associated fee), so it’s best to complete that task at the same time as you’re registering your leased car.

Related: How to register a car in another state after moving

So, can you move states with a leased car? Yes, unless your lessor specifically forbids it, you can. There are, however, quite a few things to keep in mind when leasing a car and moving to another state – you need to fulfill all your obligations as a lessee, comply with all relevant rules and regulations, and take care of the required paperwork in due time.

Moving to another state is a complicated process – moving with a leased car even more so. If you plan and prepare well, though, things will go like clockwork and you’ll be congratulating yourself on your successful move while cruising the roads of your new home state in your leased vehicle.