Leasing a Vehicle

Definitions

Leased Vehicle
A leased vehicle is any vehicle used by a person or entity (lessee) offering some form of compensation to use the vehicle and who has an agreement with the owner of the vehicle (lessor) for such use for a period of twelve months or more.
Lessee
The person or entity offering compensation in exchange for the use of a vehicle for twelve months or more, generally under contract.
Lessor (owner)
The person or entity offering the use of a vehicle for twelve months or more in exchange for compensation. In Virginia, lessors do not need to be licensed. Also, the lessor may be known as a leasing company. A Virginia licensed vehicle dealer may be considered the vehicle lessor for purposes of the Motor Vehicle Sales and Use Tax exemption.
Power of Attorney (POA)
A legal document granted to the selling dealership which gives the dealership the authority to handle all paperwork (i.e. titling, registration, etc.) for your leased vehicle.
Rental Vehicle
A rental vehicle is any vehicle used by an entity (renter) for a period of less than twelve months, offering some form of compensation to use the vehicle and who has an agreement with the owner of the vehicle (rentor or rental company). (§ 58.1-2401)
Residual Value
The value of a leased vehicle at the end of the term of the lease. Generally specified in the lease contract.
Selling Dealer
The Virginia licensed vehicle dealer who sold the vehicle to the lessor and arranged for the lease between the lessee and the lessor.

Titling Your Leased Vehicle

Registering Your Leased Vehicle

The vehicle can be registered in the lessor's (owner) name or the lessee's name. If the lessor permits DMV to include the lessee name and address in the registration address field on the title record at DMV, the lessee has the ability to handle all vehicle registration transactions for the leased vehicle. If not, the lessee may also do so by using a power of attorney from the lessor. By including the lessee's name in the registration address field on the title record, the lessee can transfer plates to and from the leased vehicle, order special or personalized plates, and renew the vehicle registration. The lessee will receive any refunds of registration for the leased vehicle without the need to provide a power of attorney. Otherwise, all information including registration renewals will be mailed to the lessor.

At the End of Your Lease...

Personal Property Information

Some leased vehicles may qualify for Personal Property Tax Relief as provided in § 58.1-3523, et.seq. Vehicles leased to a person (versus a business) and used predominantly for non-business purposes may qualify for car tax relief. If you have not received car tax relief on a leased vehicle that you believe qualifies, contact your leasing company and ask them to be sure to report your vehicle to DMV. If your leasing company has reported your leased vehicle to DMV and you have not received car tax relief, contact your local Commissioner of the Revenue or Director of Finance.

Leasing companies are required to report potentially qualifying leased vehicles to the DMV. Commissioners of the Revenue, in turn, use this information to identify vehicles qualifying for tax relief. (§ 46.2-623.)