How do you sell a car that is still on lease?

Who owns a leased car?

During the lease the lessor owns the car. You are registered as the responsible user (vastutav kasutaja) — the person using the vehicle under a contract of use or a sale with retention of title (Traffic Act § 2 p 93). That holds for both finance and operating leases.

Everything else follows from this. You cannot pass on ownership you do not have, and lease terms may expressly forbid disposing of the asset while the contract runs. So neither the sale nor the change of ownership can happen without the lessor.

Three ways to sell a leased car

Which route fits depends on how much of the lease is left and whether you have the money to end it. All three involve the lessor.

• End the lease, then sell. You ask the lessor for a termination calculation, pay off the balance, and the lessor registers the change of ownership. The car is then yours and the sale proceeds as usual.
• Use the buyer’s money to end the lease. The buyer’s payment covers the lease balance and the rest comes to you. Exactly how the money moves and when the lessor transfers ownership has to be agreed with the lessor in advance.
• Have the buyer take over the lease. If the lessor agrees, the buyer steps into the contract in your place. The bank assesses the buyer’s creditworthiness as for a new lease, and the decision is the bank’s.

With an operating lease, buying the car out may not be provided for at all. Check the contract and ask the lessor whether a sale is possible.

In what order

1. Ask the lessor for the early-termination amount as of a fixed date, and whether ending or transferring the contract carries a fee.
2. Set the asking price. It has to cover at least the lease balance — if the sale price falls short, you pay the difference yourself before the lessor transfers ownership.
3. Once there is a buyer, agree with the lessor and the buyer how the money moves and when the change of ownership happens.
4. After the balance is paid, the change of ownership is registered with the Transport Administration. At least some banks start it in the e-service themselves and the new owner confirms.

How the change of ownership works and what it costs: sale contract and ownership transfer →

Taxes: registration fee and motor vehicle tax

When a lease ends and the car passes from the lessor to you, the registered responsible user, it does not count as a first change of ownership and no registration fee arises (Traffic Act § 190¹⁸ (4) p 1). If you then sell the car on, that is the first change of ownership (§ 190¹⁸ (5)) — and the registration fee is due if it has not been paid for the car before.

During the lease, the annual motor vehicle tax is paid by the responsible user, not the lessor (Motor Vehicle Tax Act § 5).