Moving to Florida with a leased car: What you need to know
If you are moving to Florida, you in for an amazing life. But, you may also have a checklist of things to do before you head to the sunshine state; things like figuring out your car lease situation.
Car leases are tough because they are iron-clad and often have very little wiggle-room for negotiation or addendums.
And, in Florida, you’ll likely need a car because our public transportation is “evolving”. And while you will probably want to leave some things behind when moving to Florida, a car isn’t one of them.
This blog isn’t meant to give you advice on how to take your leased car to Florida, but to give you a set of questions and scenarios to think about to better prepare you for the process.
Let’s jump in.
Step 1: Understand Your Lease Agreement
Before you pack up and move to Florida with your leased car, it’s crucial to read your lease agreement thoroughly.
There can be some strange language in there that you are unfamiliar with. We get it because our real estate contracts can be a real pain to read through.
Here are some things to locate in the contract:
- Does the dealership you leased through allow for out-of-state moves?
- Identify your lessor (the company who is doing the leasing)
- Is your lease manufacturer backed?
- Is your lease bank leased?
Point (1) is important because it will tell you if your lease is restricted to your home state. Sometimes that lease contract specifically states that you can’t take your out of state.
The specific dealership or company owns the car, and essentially, you are renting the car from a company that is only locally present.
Point (2) is important because you need to know who actually executed the lease? What is just a local dealership, was it a dealership through a manufacturer, or maybe a dealership through a bank?
If your lease is a manufacturer lease (point 3), you could be in good shape because automotive companies have a presence in all 50 states (typically) and would be generally happy to find you a leasing partner in Florida.
If your lease is bank owned (point 4), you’ll need to contact the bank to see if they have partners in the state of Florida. It would depend on the size of the bank.
For example, U.S. Bank or Chase are huge American banks and have partners all over the country while city or regional banks may not have relationships in Florida.
Step 2: Figure out your early return fees (if you can’t take your car to Florida)
In the instance that you can’t take your car lease to Florida, you’ll need to return the car to the state where the lease was initiated.
If you want to keep your car but can’t, it’s a bummer, but you’ll need to prepare yourself for difficult news.
To give you an example, we will use information from Chase Bank’s lease program below.
According to Chase, if you decide to turn in your lease early, you should be aware that terminating a car lease ahead of the scheduled end date comes with additional fees and penalties.
Early termination involves several costs, which might include the payment of the remaining lease balance, an early termination fee, and possibly other charges related to the car’s depreciation.
These costs can be substantial, depending on how early you choose to end the lease.
Why do I have to pay an early return fee?
It’s easy to say that banks and car companies are money hungry, which is true, but they are incurring some substantial risk.
Your car depreciates the moment it leaves the dealership lot by 10%. So, if you buy a $60,000 car, it’s now worth $50,000.
So, the lessor is now under water with the lease by $10,000 minus any fees you paid at signing.
In addition, the car will lose 10-15% of value per year for the next 5 years which substantially depreciates the car.
So, the lessor has to account for having to sell the car for much less than $60,000.
Think of it like this: in five years, the car would have depreciated nearly $25,000—depending on the car—and the car owner (dealership, bank, company) would have to sell the car at some profit.
Step 3: Figure out your Tax Obligations in Florida (keeping car)
Moving states can complicate your tax situation.
Some states, like Florida, require you to handle car taxes differently.
In Florida, we have sales tax and use tax on leased cars. Most people don’t have an exemption, so expect to pay some taxes when you move here with a leased car.
You can find more information here on when and how to pay lease taxes in Florida.
Be advised that if your lease was transferred to another dealership or if the national bank allows you to take your lease with you to Florida, they will handle the tax payments for you with your monthly lease payment.
What if I already paid tax on my lease in another state?
If you’ve paid sales tax on a car lease in another state and then moved to Florida, you might be eligible for a sales tax credit when you register your car here.
For Florida to consider giving you this credit, a few specific things need to have happened in the state where you leased the car. First, you would have had to pay all the sales tax upfront based on the total amount of the lease payments.
Also, this tax needs to have been directly charged to you as the lessee. Additionally, the state where you leased the car shouldn’t offer refunds on the sales tax if you decide to move the car out of state.
Lastly, you’ll need to show some proof that you actually paid this tax.
Florida will give you credit for the tax you paid if all of these conditions are met.
Step 4: Update Your Driver’s License
Once you’ve registered your car, don’t forget to update your driver’s license at the Florida DMV.
You may need to surrender your old plates, and the DMV might require additional tests or documentation, like a vision test or proof of residency.
Aim to handle this within the first 30 days after your move.
Step 5: Inform Your Insurance Company
When relocating with a leased car, notifying your insurance company is a must.
And, you’ll need to do this step prior to step 6.
Insurance requirements and rates can vary significantly from state to state.
You need to brace yourself for Florida car insurance rates. They are currently the most expensive in the country.
There is a chance your current insurer doesn’t operate in Florida, so you’ll need to find a new provider that meets Florida’s insurance requirements.
Step 6: Registration and Retitling Your Leased Car in Florida
At this point, you’ve already been approved with the lessor to move to Florida, and you’re well on your way to driving the car you want in the state you want to live in.
Now, you’ll need to retitle and register your leased car in Florida.
Typically, this needs to be done within 10 days of moving.
Here are the steps to complete:
- First, you’ll need to let Florida know your VIN through a verification process. Here is the form. You can find your VIN typically on the inside of your driver’s door.
- Second, you’ll want to schedule an appointment with the county tax collector. Just go to a browser and type in “[county name] FL tax collector office”
- Third, bring your lease contract with you to show proof of ownership and lease contract.
- Fourth, bring you driver’s license, state ID card, or passport.
- Fifth, bring proof of your Florida car insurance. Don’t wait on this; the rates might surprise you. It’s
Table 1: Key Actions and Documents for Moving a Leased Car to Florida
| Action Item | Required Documents |
|---|---|
| Register and Retitle Car | Current registration, title certificate, insurance ID |
| Update Driver’s License | Old driver’s license, proof of Florida residency (ex: Utility bills/lease/mortgage) |
| Inform Insurance | Current insurance policy, new Florida policy details |
Table 2: Possible Costs Associated with Moving a Leased Car
| Cost Item | Estimated Cost |
|---|---|
| Registration Fees | Variable (state-dependent) |
| Lease Termination Fees | Remaining balance + fees |
| Professional Moving Fees | Dependent on service provider |
Conclusion
Moving to Florida with a leased car involves several critical steps, from understanding your lease terms to handling registration and insurance changes.
We understand this process isn’t easy. We’ve helped hundreds of people make the move to Florida, but it doesn’t mean the details get any easier.
We hope this guide was helpful and at the very least gave you some ways to prepare for your move.
With proper planning and awareness of the requirements, you can ensure a smooth transition to your new Floridian lifestyle.
