Free Vehicle Lease Agreement Template

VEHICLE DESCRIPTION

Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the following described motor vehicle (the "Vehicle"):

Year/Make/Model: 2023 Toyota Camry (Silver)
VIN: 1HGBH41JXMN109186
License Plate: ABC 1234
Odometer at Delivery: 45,000 miles
Condition at Delivery: Excellent

Lessor certifies that the Vehicle has no pre-existing damage at the time of delivery.

Lessor represents and warrants that: (a) Lessor is the legal owner of the Vehicle and has the right and authority to lease it; (b) the Vehicle is free and clear of all liens, encumbrances, and security interests; (c) the Vehicle is in safe and operable condition; (d) all required registration and inspection documents are current; and (e) the title is clean and not salvaged, rebuilt, or flood-damaged.

Federal Odometer Disclosure. In compliance with the Federal Odometer Act, 49 U.S.C. § 32705, and the implementing regulations at 49 C.F.R. Part 580, Lessor certifies to the best of Lessor's knowledge that the odometer reading stated above reflects the actual mileage of the Vehicle unless otherwise noted in writing. Any odometer statement required by federal or state law at delivery or return of the Vehicle shall be executed by the parties on the form prescribed by the applicable state motor-vehicle department.

LEASE TERM

The lease term shall commence on May 1, 2026 and shall terminate on April 30, 2027, unless earlier terminated in accordance with this Agreement. Neither party may extend the lease term without the written consent of the other party. Upon expiration or termination, Lessee shall immediately return the Vehicle to Lessor at the address stated above in the same condition as received, subject to ordinary wear and tear.

CONDITION REPORT

Both parties shall conduct a joint inspection of the Vehicle at the time of delivery and at the time of return. The condition of the Vehicle shall be documented in writing at both times, including odometer readings, photographs (if practicable), and notation of any existing damage, defects, or mechanical issues. The delivery condition report shall be attached to this Agreement as an addendum and shall be signed by both parties. Any damage not documented on the delivery condition report shall be presumed to have occurred during the lease term and shall be Lessee's responsibility.

LEASE PAYMENTS

Lessee agrees to pay Lessor $500.00 per month, due on the 1st of each month, payable by personal check, cashier's check, electronic transfer, or other mutually agreed-upon method. The first payment is due on or before the commencement of the lease term.

Security Deposit: Lessee shall pay a security deposit of $1,000.00 to Lessor prior to or upon delivery of the Vehicle. The security deposit shall be held by Lessor and returned to Lessee within fourteen (14) days after the Vehicle is returned, less any deductions for unpaid lease payments, excess mileage charges, damage beyond ordinary wear and tear, cleaning fees, or other amounts owed under this Agreement. Lessor shall provide Lessee with an itemized statement of any deductions.

Late Fee: If any lease payment is not received within five (5) days of the due date, Lessee shall pay a late fee of $50.00 for each late payment. Lessor reserves the right to charge additional late fees for each subsequent period of non-payment.

MILEAGE LIMITATIONS

Lessee shall not exceed 12,000 miles per year during the lease term. Mileage shall be prorated for partial years. Upon return of the Vehicle, the odometer shall be read and any excess mileage shall be charged at a rate of $0.25 per mile over the allowed limit. Excess mileage charges shall be deducted from the security deposit or invoiced separately to Lessee within thirty (30) days of Vehicle return.

INSURANCE

Lessee shall obtain and maintain, at Lessee's sole expense, a comprehensive automobile insurance policy covering the Vehicle throughout the entire lease term, in compliance with the financial-responsibility or compulsory-insurance law of the State of California. The insurance policy shall include, at minimum:

(a) Liability Coverage: 100/300/100 liability, $500 deductible collision, in no event less than the state's mandatory minimums
(b) Collision Coverage: Full collision coverage with a deductible not to exceed $1,000
(c) Comprehensive Coverage: Full comprehensive coverage (theft, vandalism, weather, animal damage) with a deductible not to exceed $1,000
(d) Uninsured/Underinsured Motorist: As required by the state of registration

Lessor shall be named as an additional insured and loss payee on the insurance policy. Lessee shall provide Lessor with a certificate of insurance prior to or upon delivery of the Vehicle and promptly upon any change in coverage. Failure to maintain required insurance shall constitute a material breach of this Agreement and Lessor may immediately terminate the lease and repossess the Vehicle subject to the peaceful-repossession requirements of UCC § 2A-525 as enacted in the State of California.

WARRANTIES AND CONSUMER LEASE DISCLOSURES

Except for Lessor's express representations above regarding title, condition, and operability, and any non-waivable implied warranties of merchantability and fitness for a particular purpose under UCC §§ 2A-210 through 2A-216 as enacted in the State of California, the Vehicle is leased on an "as-is" basis to the fullest extent permitted by law. Any remaining manufacturer's written warranty is subject to the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 et seq. If this Agreement is a "consumer lease" within the meaning of the federal Consumer Leasing Act, 15 U.S.C. §§ 1667–1667f, and Regulation M, 12 C.F.R. Part 1013 (generally, a lease of personal property primarily for personal, family, or household purposes with total contractual obligations not exceeding the statutory threshold, currently $69,500 as indexed for inflation), Lessor shall provide Lessee with all required written disclosures on or before consummation and Lessee retains all non-waivable protections afforded consumer lessees under those statutes. Lessee's rights under any applicable state "lemon law" (see, e.g., Cal. Civ. Code § 1793.22 (Tanner Consumer Protection Act); N.Y. Gen. Bus. Law § 198-a; Tex. Occ. Code ch. 2301) are not waived by this Agreement.

MAINTENANCE AND REPAIRS

Lessee shall be responsible for all routine maintenance and upkeep of the Vehicle during the lease term, at Lessee's sole expense, including but not limited to: oil changes and filter replacements (at manufacturer-recommended intervals or every 5,000 miles, whichever comes first), tire rotations, brake inspections, fluid level checks and top-offs, wiper blade replacement, battery maintenance, and all other manufacturer-recommended service. Lessee shall use only manufacturer-approved parts and fluids. Lessee shall keep all maintenance receipts and provide copies to Lessor upon request. Failure to properly maintain the Vehicle shall constitute a breach of this Agreement.

Lessee shall not make any mechanical, structural, or cosmetic modifications to the Vehicle without the prior written consent of Lessor. Any authorized modifications shall become the property of Lessor upon return of the Vehicle unless otherwise agreed in writing.

AUTHORIZED DRIVERS

Only Lessee is authorized to operate the Vehicle. No other person may drive the Vehicle without the prior written consent of Lessor. Lessee shall be solely liable for any damage, loss, or liability arising from unauthorized use of the Vehicle by any third party.

USE RESTRICTIONS

Personal and commuting use only. Vehicle shall not be used for ride-sharing services, racing, off-road driving, or towing.

The Vehicle shall be used only for lawful purposes and in accordance with all applicable federal, state, and local laws and regulations. Lessee shall not:

(a) Use the Vehicle for any commercial purpose, ride-sharing service, delivery service, or rental to third parties without Lessor's prior written consent;
(b) Operate the Vehicle while under the influence of alcohol, drugs, or any intoxicating substance;
(c) Transport hazardous materials, illegal substances, or contraband in the Vehicle;
(d) Use the Vehicle for racing, competition, off-road driving, or any purpose for which it was not designed;
(e) Remove the Vehicle from the continental United States without Lessor's prior written consent;
(f) Use the Vehicle to tow any trailer, vehicle, or other object unless the Vehicle is specifically designed and equipped for towing and Lessor has given written consent;
(g) Allow the Vehicle to be driven by any person whose license has been suspended, revoked, or who is otherwise not legally permitted to operate a motor vehicle.

Smoking: Smoking, vaping, and use of any tobacco products inside the Vehicle is strictly prohibited. Any evidence of smoking in the Vehicle shall result in a cleaning fee of not less than $250.00, deducted from the security deposit.

Pets: No animals or pets shall be transported inside the Vehicle without Lessor's prior written consent. Any evidence of pet transport (hair, odor, damage) shall result in a cleaning fee deducted from the security deposit.

Modifications: Lessee shall not make any alterations, modifications, or additions to the Vehicle, including but not limited to aftermarket parts, paint, decals, tinting, or electronic modifications. Any unauthorized modifications must be reversed at Lessee's expense before returning the Vehicle.

WEAR AND TEAR STANDARDS

Lessee acknowledges that the Vehicle is subject to ordinary wear and tear during the lease term. "Ordinary wear and tear" means deterioration that occurs naturally and inevitably from normal use. The following standards shall apply when determining whether damage exceeds ordinary wear and tear:

Exterior: Minor surface scratches less than 2 inches in length that do not penetrate the clear coat are considered ordinary wear. Dents, dings greater than the size of a quarter, cracked or broken glass, missing parts, paint chips exposing bare metal, and significant scratches are considered excess wear.

Interior: Minor scuffing of floor mats and slight fading of upholstery are considered ordinary wear. Tears, burns, stains, excessive soiling, broken components, missing parts, and odors (smoke, pet, mold) are considered excess wear.

Mechanical: Normal brake pad wear, tire wear consistent with mileage, and minor fluid consumption are considered ordinary wear. Mechanical damage resulting from neglect, abuse, improper fueling, or failure to maintain the Vehicle is considered excess wear.

Tires: All tires must have a minimum tread depth of 3/32 inch upon return. If any tire falls below this threshold, Lessee shall replace it with a tire of comparable quality prior to return or reimburse Lessor for the replacement cost.

EARLY TERMINATION

Either party may terminate this Agreement prior to the expiration of the lease term by providing the other party with at least thirty (30) days' prior written notice. If Lessee terminates the Agreement early, Lessee shall pay an early termination fee of $1,000.00, which represents agreed-upon liquidated damages to compensate Lessor for the loss of anticipated lease payments and is not a penalty. The early termination fee shall be payable in full upon return of the Vehicle. Lessor may also terminate this Agreement immediately and without notice if Lessee breaches any material provision hereof.

DEFAULT AND REPOSSESSION

The following events shall constitute a default under this Agreement:

(a) Failure to make any lease payment within ten (10) days of the due date;
(b) Failure to maintain the required insurance coverage;
(c) Use of the Vehicle in violation of the use restrictions set forth herein;
(d) Allowing an unauthorized person to operate the Vehicle;
(e) Filing for bankruptcy or insolvency by Lessee;
(f) Arrest, seizure, or impoundment of the Vehicle due to Lessee's illegal activity;
(g) Any material breach of the terms and conditions of this Agreement.

Upon default, Lessor shall provide Lessee with written notice specifying the nature of the default. Lessee shall have five (5) business days from receipt of notice to cure the default (except for non-payment, which must be cured within three (3) business days). If Lessee fails to cure the default within the specified period, Lessor may exercise all rights and remedies available under UCC Article 2A as enacted in the State of California (including the rights set forth in UCC §§ 2A-523, 2A-525, and 2A-527), including terminating this Agreement and retaking possession of the Vehicle without judicial process so long as such retaking can be accomplished without a breach of the peace. Lessee agrees to surrender the Vehicle voluntarily upon demand. Any liquidated damages shall be subject to UCC § 2A-504 and applicable state anti-deficiency or consumer-lease protections.

DISPUTE RESOLUTION

In the event of any dispute arising out of or relating to this Agreement, the parties agree to first attempt to resolve the matter through good-faith negotiation. If negotiation fails within fifteen (15) days, the parties shall submit the dispute to non-binding mediation before a mutually agreed-upon mediator. Each party shall bear its own costs of mediation, and the mediator's fees shall be shared equally. If mediation fails to resolve the dispute, either party may pursue litigation in a court of competent jurisdiction.

ACCIDENTS AND DAMAGE

In the event of any accident, collision, theft, vandalism, or damage involving the Vehicle, Lessee shall: (a) immediately notify local law enforcement if required by law; (b) obtain a police report if applicable; (c) notify Lessor within twenty-four (24) hours of the incident; (d) notify the insurance company promptly; (e) not authorize any repairs without Lessor's prior written consent, except emergency repairs necessary to prevent further damage or ensure safety; and (f) cooperate fully with Lessor and the insurance company in processing any claims. Lessee shall be responsible for any insurance deductibles and any damage costs not covered by insurance.

INDEMNIFICATION

Lessee shall indemnify, defend, and hold harmless Lessor from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorney's fees) arising out of or relating to Lessee's use, operation, possession, or maintenance of the Vehicle during the lease term, including but not limited to personal injury, property damage, traffic violations, parking tickets, toll charges, and any other liability arising from Lessee's possession of the Vehicle. This indemnification obligation shall survive the expiration or termination of this Agreement.

RETURN OF VEHICLE

Upon expiration or termination of this Agreement, Lessee shall return the Vehicle to Lessor at Lessor's address stated above, or at such other location as mutually agreed, in the same condition as received, subject to ordinary wear and tear. The Vehicle shall be returned with: (a) all keys, remote controls, and accessories that were provided at delivery; (b) a full tank of fuel (or the same fuel level as at delivery); (c) a clean interior and exterior; (d) all personal property removed. Both parties shall conduct a joint inspection at the time of return and document the Vehicle's condition.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of California, including its enactment of Article 2A of the Uniform Commercial Code, its motor-vehicle titling and registration statutes, its financial-responsibility laws, and any applicable consumer-protection or lemon-law statutes. Any legal action arising out of this Agreement shall be brought in the state or federal courts of said state.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties regarding the lease of the Vehicle and supersedes all prior negotiations, representations, and agreements, whether oral or written. No modification of this Agreement shall be effective unless in writing and signed by both parties. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.