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What is a Novation?

A novation is the transfer of a lease agreement from one business to another.  

Novation can usually only happen if both businesses meet a number of criteria established by the funder, and not all of our funders will offer novation. You can take a look at each of our funder’s processes by clicking on their name below. 

When you novate a lease the terms of the contract will remain the same, which includes the type of contract, the length of the lease, the annual mileage and any maintenance elements.

Please note that you cannot usually transfer a lease from a business to an individual or vice versa as this would be a change in the type of contract which is not possible.

Why Would You Need a Novation?

There are a few reasons why you might need a novation but the main one is if a company has been bought out by another and the assets need to be transferred across to the new company.


We’ve included a general idea of what criteria our funders look for below. This is not an extensive list and some finance companies may request other information these are just some general guidelines.

  • A novation can usually only be between two limited companies unless otherwise specified. This includes LTDs, LLPs and PLCs.
  • There will usually need to be at least 6 months of the contract term left but some funders may ask for up to a year.
  • Both businesses will need to be solvent. There are some cases were exceptions will need to be made but you will need to check with your finance company.
  • The contract type will remain the same.
  • The current contractual agreement cannot be in arrears.
  • The addresses on the documents must match the companies’ listed addresses on Company’s House.

Please note that the company taking over the lease must have a credit check as part of the approval process before the transfer can take place.


How Much Does It Cost?

The cost of novation depends on your funder and it would be best to contact them directly to confirm what, if any, the charge is.

Where they have advised us of any charge we have included it in the details below. 

What’s the Process?

Whether novation is possible and the exact process if it is varies depending on your lease funder.

We’ve spoken to each of our funders to get a little more information on each of their processes for you. Just take a look at your funder below.

Please note that if your lease is funded through manufacturer finance then you will need to contact them directly to discuss this. We have listed their numbers on the list below.


If your lease is with ALD you can novate the agreement provided that it is from one limited company to another.

They cannot allow a novation from a regulated customer to a non-regulated one, for example a sole trader to limited company.

To discuss a novation you will need to call ALD directly on 01179086472.


Alphabet have advised that they can only offer novation for contracts where both businesses are either an LTD, LLP or a large partnership, which is classed as one with four or more partners.

In order to request a novation with Alphabet they have advised there are a few forms that need to be completed and returned. If you decide you need to novate your lease please either get in touch with us or Alphabet directly on contract.support@alphabet.co.uk to request the required forms.

In order to proceed with a novation Alphabet also require a full set of accounts for the business taking over the lease, or if it is a new business a copy of the opening balance sheet.

Alphabet have advised us that there is a cost of £399 + VAT for one vehicle or £499 + VAT for two or more vehicles which will need to be paid by the new hirer.

Please note that there will be a credit check as part of the application process for the new business, and once this has been completed the finance documents for novating the lease will be sent to both companies to complete.


Arval can offer novation of a lease from one business to another but they look at each request on a case by case basis and the company taking over the lease will be subject to credit checks.

In order to arrange a novation Arval require both customers’ names, phone numbers, email addresses and full postal addresses. You can provide this information either by calling them on 03452665228 or emailing on brokercustomerservices1@arval.co.uk.

Arval have advised that there is a charge of £100 + VAT per vehicle for 1-50 vehicles but if you are novating a fleet that is more than 51 vehicles it will be £75 + VAT per vehicle.


Hitachi will allow business customers to novate a contract from one limited company to another.

They will also consider a transfer of a personal lease from an individual to a limited company, but this is looked at on a case by case basis.

In order to process any novation or transfer request Hitachi require you to complete a transfer request form which we can request on your behalf or you can ask them for directly.

This form will request details of the company currently leasing the vehicle, the registration number, the details of the company looking to take over the lease and the reason for transfer.

Once the form has been completed Hitachi will then run their application process, which includes a credit check, on the company looking to take on the lease and if approved the paperwork will then be issued for you to sign.

Please note that Hitachi have advised there is a charge for this process of £250 + VAT.


LeasePlan can offer a novation from one limited company to another, which includes LTDs, LLPs and PLCs, provided that both businesses are solvent. If you are a sole trader and the contract is an unregulated one then you can also novate the contract to a limited company.

The contract parameters, including lease length and mileage allowance as well as the contract type will remain the same.

Please note that the company taking over the lease will need to have credit approved with LeasePlan before the novation is requested.

The process can take up to two months to be completed depending on how quickly documents are signed.

LeasePlan can only process a novation if the contract has 12 months or more left on it and usually only once the lease is older than six months. If a novation is needed and less than six months have passed since the start of the contract then extra information will be requested to support the request.

If the contract is in arrears then the novation request will be denied.

In order to process the request LeasePlan ask that you provide us with the below information so that we can make the request for you:

  • Registration of the vehicle to be novated
  • Current customer company name, address and Companies House number
  • New proposed company name, address and Companies House number
  • The name and number for a chosen contract at the new company

Please note that the address for both businesses will need to match the one on Companies House, if the registered address is not the trading address please let us know.

Once the novation is approved LeasePlan will issue you with the finance deeds, direct debit mandate and a covering letter which explains what needs to be done for you.

Both companies will need to sign three copies of the deed and the direct debit mandate and in some cases a corporate or director’s guarantee might also be required.

These signed documents will need to be returned before the expiry date and sent via recorded delivery to LeasePlan.

LeasePlan will let us know once the novation is countersigned by them and the date it will take effect from.

Please be aware there is a £200 + VAT admin fee for this process that will be invoice to the new customer.


Leasys can offer novation from one limited company to another.

In order to novate the contract you will need to get in touch with them directly to complete a credit proposal so that they can run the necessary credit checks on the new business. You can do this by emailing them on contractsmanagement.uk@leasys.com.

Leasys have advised that there will be a charge of £100 + VAT for the novation process.  


If your lease is with Lex and you would like to novate the agreement they advise that they can only do so for and to limited companies or large partnerships provided there are four or more equity partners and the business has been trading for a minimum of two years.

In order to process a transfer of lease they require the below information:

  • A signed letter, on company headed paper, for each company authorising the transfer
  • The new business’ full bank account details
  • The latest copy of the new business’ accounts
  • For the director / partner of the new company they will need:
    • Full name
    • Date of birth
    • Full address and proof of this dated within the last six months
    • If they have been at their current address for less than five years Lex will also require five years of address history
    • Their marital status
    • Their homeowner status
    • The driving licence of the individual directors noted on the transfer form, which must be in their current address

Along with this they require the electronic completion of a form. We can request this on your behalf, or you can get in touch with Lex directly on 03448796633.

All details will need to be emailed to Lex on Customer.Services@lexautolease.co.uk and the request will not be processed until all the details are received by Lex. 

Once the transfer has been processed Lex will contact you directly either via telephone or email.

Please be aware that Lex require a minimum of six remaining monthly payments in order to be able to process the request for your novation. 

Wessex Fleet:

If your lease is through Wessex Fleet, then you may be able to novate the contract provided it is from one business to another.

Wessex Fleet look at each novation on an individual basis and if you need to novate your lease agreement you will need to contact them directly on 01722322888 (option 3).


Please be aware that the above guidance is for a standard business to business novation where the original lease holder is not insolvent. If the original contract holder does enter insolvency then you will need to contact the funder directly to discuss the options available.

Contact Details:

ALD - 01179086472

Alphabet - 03700120392 (option 4)

Arval - 03706004499 

Audi Financial Services - 03700102007

BMW Financial Services - 03705050150

Hitachi - 03444632900 

LeasePlan - 03444935811 

Leasys - 03702413727


Lex Autolease - 03448796633

Mercedes-Benz Finance - 03708470700

Nissan Finance - 03330090231

Seat Financial Services - 03703334446

Skoda Financial Services - 03703334449

Renault Finance - 03330090233

Volvo Financial Services - 01926401203

Volkswagen Financial Services - 03700102022

Wessex Fleet - 01722322888 (option 3)

For more information on novation, you can get in touch with our Customer Services Team on 03302210000 (option 2) or contact your funder directly.

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