Closed-End Lease of An Automobile Without Option to Buy
1. Parties. This Agreement is made between [name] of [address] (Lessee) and [name] of [address] (Lessor).
2. Subject Matter of Lease. The subject matter of this Lease is an Automobile. Lessee hereby warrants that Lessee has received the Automobile described below in good and working condition.
3. Description of Automobile. The Automobile is described as follows: [a full description of the vehicle being leased, e.g., new or used, mileage, make, model, vehicle identification number]. This vehicle is being leased for the purpose of [type of use, e.g., personal, commercial].
4. Title. The legal title to the Automobile shall remain in the name of Lessor.
5. Manner of Payment. The following payments shall be made at the inception of the Lease: [payments and credits to be made, e.g., capitalized cost reduction, trade-in allowance, taxes, deposits, licensing fees]. The total amount due is ........ dollars ($........). Monthly payments are to be made on the first of every month after the date of this Lease. These payments include [elements that make up monthly payments, e.g., rental charges, taxes]. The total monthly payment is ........ dollars ($........). Any payment received by Lessor more than ten days after its due date will incur a late charge of ........ dollars ($........).
6. Term of Lease. The term of this Lease is for [number] months.
7. Depreciation. The total depreciation during the term of this Lease is ........ dollars ($........). The depreciation portion of the monthly rental charges is determined by applying to the unpaid total depreciation the constant rate that will amortize this total depreciation over the term of the Lease by payment of the monthly charges.
8. Total Amount of Fees and Taxes for Lifetime of Lease. The estimated amount of fees and taxes that Lessee will be responsible for during the lifetime of this Lease is ........ dollars ($........). [This amount should be itemized by separate costs, e.g., title, license and registration, taxes].
9. Limitations on Use of Vehicle. The monthly rate for use of this Vehicle is based upon the agreement that Lessee will not exceed [number] miles per year. Should Lessee exceed this mileage limitation, Lessee shall be obligated to pay an excess mileage charge at the end of the Lease term. This charge will be based on a calculation of ........ cents ($0........) for each mile in excess of the mileage allotted under this Agreement.
10. Excessive Wear and Tear. Lessee agrees to make use of the Vehicle to the extent of normal wear and tear. Any wear and tear in excess of this amount shall be charged to Lessee at the termination of the leasehold. The amount of payment shall be determined by the cost of repair. This excessive wear and tear includes, but is not limited to, [description, e.g., dented bumpers, broken glass].
11. Insurance. Lessee agrees to maintain insurance on the leased Vehicle for the duration of the leasehold. The amounts of insurance coverage are to be maintained as follows: ........ dollars ($........) comprehensive coverage, with fire and theft, with a deductible no greater than ........ dollars ($........); ........ dollars ($........) collision coverage, with a deductible no greater than ........ dollars ($........); liability insurance with limits of not less than ........ dollars ($........) for any one person for bodily injury or death, and ........ dollars ($........) for property damage. Lessee shall furnish Lessor with the name of the insurance company covering the Vehicle, the policy number, and agent's name and address, along with whatever other written proof of insurance Lessor shall request. Lessor shall be named as the loss payee on the insurance policy.
12. Maintenance. Lessee is fully responsible for all maintenance, service, and repairs of the Vehicle. This includes regular maintenance checks as provided by the owner's manual. In addition, Lessee shall pay for gas, oil, and any other expenses that the parties may agree to that the use of the Automobile incurs.
13. Location of Vehicle. The leased Vehicle is to be kept in a locked garage located at the address that Lessee stated in this Agreement. The Vehicle is at no time to leave the continental United States. The Vehicle is not to leave [state] for periods longer than [number] days.
14. Liability. All persons signing this Lease shall be jointly and severally liable for the care, maintenance, and payment of this Vehicle. They are fully liable for any damages to the Vehicle, or injuries resulting from the use thereof.
15. Assignment of Lease. Lessee may not assign any of Lessee's rights under this Lease. Lessor may assign Lessor's rights under this Lease. Lessee agrees that upon proper notice of this assignment, Lessee will make future payments and surrender the Automobile at the Lease's expiration to this assignee.
16. Indemnification. Lessee agrees to indemnify Lessor against any claims or losses arising out of the operation of this Vehicle during the period of the Lease.
17. Use of Security Deposit. The security deposit that is held by Lessor, may be used by Lessor to pay all charges and costs that Lessee is obligated to pay under this Agreement but fails to pay. If unused for such purposes, the security deposits shall be returned to Lessee at the termination of the Lease. Interest shall be paid on the amount of the deposit as required by law.
18. Default. Lessee shall be in default if any of the following events occur: [list of what constitutes default, e.g., failure to make payments, bankruptcy, death]. Should Lessee be in default, Lessor may terminate the Lease and take possession of the Vehicle in any manner without breach of the peace. Lessee will still remain liable for any fees or payments that Lessee is responsible for under this Lease. Lessee will be liable to Lessor for the costs of litigation in this matter, including attorney fees. Lessor may sell the Vehicle at private or public auction with [nature and time of notice] notice to Lessee. The amount to be used in calculating Lessee's liability in the event of default is ........ dollars ($........) [estimated residual value].
19. Lessor's Warranties. Lessor makes no warranties in regard to the leased Vehicle. Lessor is leasing the Vehicle "as is." Lessor makes NO IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
20. Termination Procedure. Lessee has no right to an early termination of this Lease. At the end of the life of this Lease, Lessee shall return the Automobile, to a place designated by Lessor in writing, to Lessee at least sixty days prior to the termination date of this Agreement.
21. Notices. Notices are to be sent in writing, by certified mail, to the addresses of both parties as indicated in this Lease Agreement.
22. Governing Law. This Lease is governed by the laws of [state].
23. Entire Agreement. This Lease represents the entire agreement of the parties. This Lease may be modified only by a written agreement signed by both Lessor and Lessee.
24. Severability. Should any portion of this Lease be held invalid, the remaining portions shall be severed to the extent possible by law and shall remain binding and enforceable.
25. Lessee's Acknowledgments. Lessee hereby acknowledges that: He [ or She] has read and understands the meaning of this Agreement and his [or her]obligations under it; he has received a legible copy of this Lease; he has received a fully completed copy of any other document that he has signed in relation to this Lease, including applicable credit agreements; and, that he has accepted delivery of the Automobile in good working condition.