Purchasing your leased vehicle? Be sure to notify your insurance agent!
You’ve done your research. You love the vehicle you’ve been leasing, and you want to own it. You negotiate the buy-out, arrange payment terms, and sign an agreement with the leasing company. Congratulations! But wait… you’re not quite done. We found that some of our clients have skipped one important step: Ownership Transfer and Re-registration!
When you purchase your leased vehicle, you may assume that the ownership transfer is complete. Afterall, you still have plates on your car, and you have an active insurance policy. When the title comes in the mail, you may think it’s just a formality and simply file it away.
Ownership transfer is NOT complete until you have received the title from the leasing company AND follow the instructions in the cover letter sent with the title. The instructions tell you to notify your insurance agent, re-register the vehicle in your name, and pay the applicable sales tax.
We suggest that you notify your agent as soon as you decide to purchase the vehicle so we can help facilitate the ownership transfer in a timely manner. Without notifying your insurance agent, neither the insurance company nor the Registry of Motor Vehicles (RMV) will be aware of the change. The leasing company does not notify them. It’s up to you!
Failure to register the vehicle promptly will result in extra interest and penalties related to sales tax once discovered. In one case, the RMV assessed $1,000 in addition to the applicable sales tax!
Furthermore, as the ownership transfer is not complete until re-registered, in the unfortunate event of theft or damage to your vehicle, unclear ownership of your vehicle may cause a delay or issue with paying a claim.
Please don’t overlook this important step. Let us know when you make changes. When we are aware, we can help.
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