Vehicle Lease Purchase Agreement Template for Saudi Arabia

The Vehicle Lease Purchase Agreement serves as a crucial document in Saudi Arabia's automotive financing sector, providing a Sharia-compliant alternative to conventional vehicle financing. This agreement is typically used when a customer wishes to acquire a vehicle through periodic payments while having immediate use of the vehicle, with ownership transferring at the end of the term. The document incorporates essential elements required by Saudi law and Sharia principles, including clear identification of the asset, specified lease term, agreed-upon payments, and purchase option details. It's particularly relevant in both consumer and commercial contexts, requiring approval from internal Sharia boards and compliance with Saudi Arabian Monetary Authority (SAMA) regulations. The agreement must balance commercial practicality with religious and legal compliance, making it a specialized instrument in the Saudi Arabian market.

1. Parties: Identification of the Lessor (finance company/dealer) and Lessee (customer), including full legal names, addresses, and official identification numbers

2. Background: Context of the agreement, including brief description of the transaction structure and Sharia compliance statement

3. Definitions: Key terms used throughout the agreement, including technical, financial, and legal terminology

4. Vehicle Description: Detailed specification of the leased vehicle including make, model, year, VIN, color, and any modifications

5. Lease Term and Purchase Option: Duration of lease, payment schedule, and conditions for exercising purchase option

6. Payment Terms: Detailed breakdown of lease payments, down payment, purchase price, and profit margin (compliant with Sharia)

7. Delivery and Acceptance: Terms regarding vehicle delivery, inspection, and acceptance procedures

8. Title and Ownership: Clarification of vehicle ownership during lease period and transfer conditions

9. Insurance Requirements: Mandatory insurance coverage and responsibilities for maintaining insurance

10. Maintenance and Repairs: Responsibilities for vehicle maintenance, repairs, and operating costs

11. Usage Restrictions: Limitations on vehicle use, geographical restrictions, and permitted drivers

12. Default and Remedies: Events of default and available remedies for both parties

13. Early Termination: Conditions and procedures for early termination of the lease-purchase agreement

14. Governing Law and Jurisdiction: Application of Saudi law and jurisdiction for dispute resolution

15. General Provisions: Standard contractual provisions including notices, amendments, and severability